Farmscape for November 9, 2023

An analyst with Global AgriTrends anticipates stepped up sow liquidations over the winter as the pork sector works to restore profitability.
"What's Next for the Global Pork Market" was the focus of the keynote address yesterday as part of Saskatchewan Pork Industry Symposium 2023.
Brett Stuart, the President of Global AgriTrends, observes we're still living in the post-COVID hangover of free and easy money, when global stimulus packages topped 18 trillion dollars, and now governments are in a pinch to rein in inflation, a fact that hog farmers see every time they buy fuel, fertilizer or feed.

Quote- Brett Stuart-Global AgriTrends:
The year-to-date losses are around 30 dollars a head and that's pretty severe.
Those are big losses.
I would say about 20 dollars of that is feed costs.
The other 10 dollars is equipment, fuel, electricity, labor, fill in the bank.
The good news is we're going to get a break in feed costs.
We've just harvested a big corn crop in the U.S.
Feed costs are coming down but that's going to take probably four months to work itself through the system but that that still doesn't get us to profitability.
We're still stuck in this inflationary period with big input costs.
When we look at profitability, if you look at lean hog futures, there isn't a window of profit until we get out to next June and that might only be for two or three months.
In agriculture we all know high prices fix high prices and low prices fix low prices but it's a difficult process in the interim.
The natural response is we liquidate sows and those who are least able to survive this downturn liquidate sows and it's a messy difficult process.
We haven't been doing much liquidation.
We've seen a slight liquidation but we've also seen a strong uptick in productivity in the swine sector and that productivity has kind of offset what liquidation has occurred thus far.

Stuart says we will definitely need to see more liquidation to restore profitability and we probably will see a little stronger liquidation over the winter.
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Bruce Cochrane.

       *Farmscape is produced on behalf of North America’s pork producers