Global Profitability in the Pork Business Has Become Challenging

     A lot of the rest of the world of pig production is sporting this feeling which borders on gloom and doom.  The pork industries globally are feeling some rather severe strains at this time profit-wise especially in Europe, Canada, Mexico and Brazil but other places too. 

     Our rather significant currency valuation advantage is helping to contribute to significant competitive advantages over other nations (especially those that target the same export markets).  If the FED decides to cut again later this month, which is being built into the stock market as an expectation as we speak (or write!), you can expect to see the dollar slide again against the pound and the Euro.

    In other cases it is high feed cost (thanks largely to Ethanol but also due to the tremendous string of bad outcomes for wheat production around the globe, especially Australia).  In other cases it is export stopping diseases and their aftermath. 

     Those nations which have a traditional production system have often added to that stock of facilities with a round of building in the last 10 years dedicated to the export markets.  These export focused facilities are typically newer, larger and are often operated all-in/all-out etc.  I suspect you would be surprised at the amount of global pork production, many times in larger systems which is managed on a continuous flow basis.

     In many countries when the profits turn sour, the producers want to petition the government to do something to restore profitability.  Its going to be harder and harder for systems which run as continuous flow units to be competitive globally.  They can't monitor costs or efficiency measures with the accuracy and timeliness that closeout systems can.