Pork Commentary – April 20, 2015 – US Pork Export Down 10% A Small Miracle

Pork Commentary

Jim Long President – CEO Genesus Inc. info@genesus.com

 

US Pork Export Down 10%

A Small Miracle

 April 20, 2015

US pork exports were 10% lower in February compared to a year before. At 377 million pounds this year, a 38 million pound decline. In our opinion a small miracle considering the US Pacific Pork issues in this time frame. When we look at the big picture a 10% decline tells us that Asia wants US pork and as the ports get back to full speed we expect US pork exports to surpass a year ago. Chinese domestic swine price last week was 12 rmb per kilogram or 94.17₵ USD liveweight per pound. Double the US liveweight price of 46.43₵. There is no way that capitalism will not push pork to China if ports and shipping get back to full speed. Every year Genesus recognises our customers who wish to participate in our 25 plus weaned for the calendar year. Many participate but many other do not want their names published. As our company has grown, we have gotten more customers and production results have continually improved. This past year our herds over 25 weaned continue to exceed all other Genetic companies. We are very happy for our customers as the prolific results combined with better growth, carcass, and health continues to put Genesus customers at the top of profit margins in any bench marking system. It makes Genesus very proud to congratulate the following customers for outstanding achievement in production. We value our customer business and see our responsibility to continue delivering ever increased genetic productivity and health.
  • This past week 52 – 54% lean hogs increased from 59.89 to 63.02 per pound, that is a 3₵ We expect a relentless price increase over the coming weeks.
  • A year ago US lean hogs averaged 219.19 pound carcass, this year 214.52 pound, or about a 4.8 pound decline. No doubt we are pulling hogs ahead. At some point this dog is going to run to the end of the chain. When weights stop dropping hog marketings will decline and hog and hog prices will jump.
  • US Pork Cut outs last Friday 67.99₵ per pound
  • US Beef Cut outs last Friday 257.79₵ per pound.
  • The spread between pork and beef will narrow. No way is the price difference sustainable. Beef will be pulling pork higher over the coming weeks.
  • Avian Flu is hitting turkeys in the US and Canada. Whole flocks are being destroyed. Not sure what it means to the pork market. Could be negative if some export markets close to US poultry. Flip side dead poultry means less meat available. Wildcard if it gets in Poultry Breeding Flocks the multiple effect of production capacity loss could be significat.
  • Grain watch has begun. As an industry we need feed prices to stay reasonable. We expect farmers being farmers, the acres will get planted. Then we watch the weather to see how our lives are affected. Last year the US summer was not hot. One result of that US hog weights and subsequently pork tonnage didn’t get pushed lower due to growth slow downs due to the heat.
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