Genesus’ Jim Long shares insights from the global pig industry

calendar icon June 8, 2023

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5 minute read

Jim Long, president and CEO of Genesus Genetics, spoke with The Pig Sites Sarah Mikesell at the opening day of the World Pork Expo in Des Moines, Iowa, USA.

In the United States, it has been a dire economic situation for manufacturers. There’s been losses of $40 to $50 per capita lately, and part of the challenge is we’ve had COVID, we’ve had low prices, and then we’ve had a spike in feed prices which has increased the cost of production. said Long.

Therefore, the past three years have been challenging for many reasons. This is now compounded by the current low prices.

A reflection of how bad it is is the amount of liquidation going on in the sow herd. From what we can add up as a genetics company, and let’s pay attention to that, there’s probably a minimum of 300,000 sows already set to be liquidated now underway, and if you want to add Canada and Mexico, you could probably add another 100,000 sows. has explained. If prices don’t start improving soon, we will have more liquidations because the losses will continue. In a bizarre way, I see some optimism because of some of the dynamics in the rest of the world. Europe has the highest prices in history. Part of the reason is that they’ve sold off a million sows and, go figure, fewer pigs, and the price goes up.

Long said the price of pigs in Europe today is double what it was at its lowest, and it has gone from an industry that was losing a lot of money to now making money, which is good to see. He expects this is what the US will experience after its liquidation.

China raises half of the world’s pigs. Exports to China are down compared to the rest of the world, but it is still the world’s largest importing country, he noted. We do business as a company in China and today we are seeing losses of $50 to $70 per capita and there is a liquidation going on.

Long said that China’s market dynamics show that they started liquidating in July 2021, and the market has been down for a year. Price rebounded from late summer to fall, then broke with COVID. They had opened everything up and people were getting sick so less people were eating pork.

Then they got hit with African swine fever again, and when they get African swine fever in China, they just send everything to slaughter, which puts more tonnage on the market and drives the price down, he explained. What’s happening? There’s no more pork after that. When it stops, we will see a huge price increase, as we saw in 2019. And China will need more pork, and that will drive up prices in the rest of the world. It’s not a question in my mind if, it’s just when.

Long said it’s a dire situation in North America, but there is room for optimism. Pig prices have recovered slightly lately. Slaughter pig numbers are decreasing from a year ago, especially if you look at weights.

Pig weights are nearly five kilos less than a year ago, reflecting a very current industry, he said. I guess we’ll see. I think the price will still exceed $1 per US pound this summer, possibly even higher due to demand.

What is causing the US market to lose?

It’s very interesting because we have significantly lower prices than last year and we have the same amount of pork supply, Long noted. Why? I’m not too sure anyone actually gets this. One thing is that the retail price went up last summer, and then the retail price never went down. So retailers are getting a very good margin on pork.

He said exports have been a bit slow. But wholesale beef prices in the US are nearly four times the price of pork. If beef is a relatively complementary product, why shouldn’t people eat more pork?

Obviously the price of beef is high because people are willing to pay for it. So it’s really a bit puzzling, she said. Other people watch the markets like me, and nobody really understands. It’s real but you can’t really rationalize it. In my mind, that’s part of the reason he can bounce back quickly. The retail price is high so that the price can go up within the retail chain and not affect the retailer much.

Is creating tastier pork a game changer for the industry?

It’s something we truly believe in. Over the past 20 years, the per capita consumption of pork in the United States has essentially flat, and at the same time the total per capita consumption of pork has increased. So as an industry, we’ve lost market share, he said.

As a genetics company, Genesus believes the industry has made the pork too lean and destroyed the flavor of the loins and hams, which account for nearly 50 percent of the carcass. Surveys indicate that driver no. 1 to purchase pork is the taste; #2 is the taste; Number 3 is taste, according to Long.

It’s about taste, and we believe we need to make pork that tastes better. As a company, we produce pork that tastes better. I see our loins in some places are carrying $2 more than others, she said. Why? Because people will pay for a better dining experience, but there has to be consistent predictability. If you’re going to have a brand, you have to deliver it every time. We’ve worked hard over the past 25 years to do this. We think as an industry, we need to push for a better dining experience for all consumers.

World Pork Expo is the world’s largest exhibition specifically for the pork industry bringing together pork producers and industry professionals from around the globe for three days of education, innovation and networking. Held annually in Des Moines, Iowa, USA, thousands of US and global pork producers, industry professionals and industry experts attend each year.

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