Pork Commentary
Jim Long President – CEO Genesus Inc. info@genesus.com
Huge Marketings Last Week
December 7, 2015
Well, we found out how many hogs can be marketed in a week in the US when 2.424 million were handled last week. Big, big number, almost 200,000 more than the same week a year ago.
- It tells us packers are making good money. USDA pork cut–outs 73.73 – Lean hogs 54.38. Our farmer arithmetic tells us that $40+ per head packer gross margin. Almost $100 million per week margin for all packers to cover costs of operations and overhead. Good time to be a packer! You need any other reason to know why new harvesting plants are going up in Iowa and Michigan.
- The 2.24 million head also tells us pork is moving domestically and for export markets. If there was no market and profit Saturday’s harvest number would not have been 241,000 head (a year ago Saturday 95,000).
- Another sign pork is moving is the decrease of pork in cold storage. In October down 50 million pounds from September, this despite a huge hog supply this October.
- We are happy packers are making money when the hog supply declines seasonally; we expect they will fight to keep market share and supply. They will bid higher quickly as the gross margin of $40 per head is not sustainable. We would not be surprised to see lean hogs jump 10₵ per pound and packer margins go to $20 in the next while. Packers are like farmers, they can’t stand prosperity. The chase for market share and shelf space is their kryptonite.
- It’s good to see Maple Leaf Foods publicity pushing back on meat being a bad protein. They have enacted a marketing program. “Protein Builds” which features Olympic Gold Medallist in hockey (also a mother) Hayley Wickenheiser.
- Maple Leaf, Canada’s leading Food Company is taking a leadership role in aggressively promoting pork’s role in a proper and healthy diet. It is a positive initiative that other pork companies should consider emulating.
Categorised in: Press Releases
This post was written by Genesus