US/Canada

“As everybody knows, the price of pigs is fairly strong historically,” said Long. “You’ve got negotiated prices over $1.10/lb in the US, and that's a good price. If you're buying feed, the cost of production is probably as high as it's ever been, and that's a challenge for everyone.”

Producers are trying to grow the industry with some building new facilities despite high building costs. On-farm labor continues to be a challenge for producers, so much so that it’s potentially limiting productivity. Disease pressure from PRRS and PEDV is also limiting production, according to Long.

“Exports aren't as strong as they have been in some prior years. I would say the industry is okay, but not wonderful,” he noted.

Europe

“I just got back for 10 days in Europe, mostly England, but I was at the British Pig and Poultry Fair with people from all over Europe who I've known for a number of years and we had a good discussion about what's going on,” said Long.

“Margins have been terrible in Europe; they are experiencing higher feed prices than here in the North America. Their cost of production is mostly higher than the price of pigs. There's ongoing liquidation in the sow herd, and I believe Europe's going to decrease about a million sows, which will obviously put less pork on the market - they'll have less domestically and less for exports. I think the prices will increase in Europe over time because of less pork available.”

China

Producers made a lot of money for 18 months during the African swine fever (ASF) crisis, said Long.

“They built up their inventories and have been over-producing. The industry, from my calculations, has been losing, up until just recently, $1 billion to $2 billion per week,” explained Long.

“There are 11 public companies that are in the pig business on the Chinese stock exchange, and collectively they lost $15 billion in the first quarter. By my calculation, that's about 1/6 of Chinese pig production. If you kind of put that over the whole industry, there's a reason there's going to be less pigs in China, and we're already seeing that happen. Small, just-weaned pigs were selling for $30, and now they're $90. I work on the premise that nobody pays more than they have to. So, if they're having to pay $90, that's a reflection of the reduced supply.”

Regarding the repopulation of China’s sow herd, Long said China had built up their inventory. Last July they started liquidating and have been liquidating ever since.

“We do the World Mega Producer list and there's one company called Zhengbang Group, who told us they had 1 million sows in 2021. They’re a public company, and they just came out a couple of weeks ago, with a decrease - announcing they have 380,000 sows now,” said Long. “So, in six to eight months, they declined by 600,000 sows - that's 10% of the US sow herd. I think that's a reflection of what's going on, but at a minimum, they've decreased 4 million sows, and it's probably higher – probably 6 million sows. That's why those little pigs have gone from $29 to $90. Because there's less of them.”

Global summary

“North America is not going to produce any more pigs, and it's already down in production. Europe is decreasing pig production every day with their production base; China is the same thing. Put the three together - I don't know any time in history, when all three major producing areas, which would be 75% to 80% of the world's pork production, are down in production at the same time. I think we will probably see pork prices higher yet, and probably record high at some point in the future. The feed price is a challenge, and I don't know what's going to happen there. You tell me what's going to happen with Ukraine and I'll tell you whether or not the corn price is going to move $2/bushel one way or the other. That's part of the reality we're dealing with. The pork supply is going to decline. What the feed price of going to do, I have no idea,” Long concluded.