Swine Industry Update: What a Difference!

Mark Greenwood
June 2008

What a difference!
I think anybody that is involved in the swine industry has breathed a sigh of relief in the last month. A month ago producers were getting maybe a $105-$110 a head for their pigs and now we have averaged over a $150 a head for pigs. An improvement of over $40 a head and this equates to a difference in extra revenue to swine producers in the US of almost $400 million improvement in one month. Producers are feeling a little better but still even though are high historically producers are not getting rich. Many producers are saying they are holding their own and not going backward or maybe making a little money. This is glimpse of hope for an industry that has been ravaged with a huge cash drain these past months.

Can we hold prices
Many producers are wondering if we can hold or maintain these prices. We have great demand on exports in fact they were up 23% in March over a year ago and we are now exporting 1 out of every 5.5 pigs in US. This is one of the primary reasons that we have had these price increases. The US pork sector is the most competitive place to raise pork in the world and other countries are buying it. The question that I have is in March wholesale cut out value was $55 and today it is over $80. I am wondering as we increase our prices can we keep our demand. Only time will tell.

All Eyes on the US Corn Crop
If you want to know what keeps me awake at night, I will show you the next two charts. One Steve Meyer presented this month that outlines high tight we are on stocks for corn and the other is the dependence of the world on the US corn crop. We currently export 53% of the corn supply that is exported by countries. No one else is even close. My concern is that we already know we have less corn planted than last year, I am not convinced that exports will be reduced and livestock use can be reduced by that amount. In addition to that we need to have a 153.9 bushel yield. If any of those items change a little we have a supply problem and we will need to be very creative on how to deal with a VERY short supply.


If you are a livestock producer when corn is one of your major costs, managing this risk is of great importance. All I can say is you have to look at how can look at all the factors and have some form of a risk management strategy that can deal with all this volatility.

COOL and Canadian Pigs
I have read many articles concerning this issue and saying that the labels will help ease the concern of Canadian pigs (especially feeder and weaned pigs) coming across the border. I agree that the label issue should ease this by the question that I still have is what will the retailer demand of the packer? I am not convinced that a retailer is going to want to have that many labels in their stores and in fact they might just want one label. The question is what label will they prefer? When you have the largest packer Smithfield that can say we will give “ All US” product what will the rest do? I think this will be worth watching and what the effects of COOL legislation will cause. Stay tuned.

PRRS Development
MJ Biologics, in conjunction with the University of Minnesota, announces a breakthrough in the control and prevention of porcine reproductive and respiratory syndrome disease (PRRS), a devastating disease of pigs worldwide. Research conducted by MJ Biologics and the University has led to the decoding of the PRRS virus and the development of a new inactivated subunit vaccine. Patent-pending Selectigen MJPRRS™ technology now offers veterinarians and swine producers a new tool in the ongoing battle against the PRRS virus. By breaking the genetic code of the PRRS virus, MJPRRS technology allows the production of autogenous vaccines that are tailored to each unique swine production system. This technology utilizes an innovative method of classifying PRRS viruses based on their immunological properties, allowing for the creation of new custom vaccines as a tool against intra-farm mutations. In addition, the enhanced cross-protection capability helps to reduce financial losses from new strains introduced into the farm. Read more.