Jim Long Pork Commentary – May 29, 2018

U.S Market Continues to Crawl Higher

The U.S hog market is certainly not exploding higher, it’s more like a crawl.  This past week 53-54% lean hogs going from 66.60 to 68.23¢ a lb.  Since the first of May 53-54% lean hogs have gained 8¢ lb.

It appears carcass weights are decreasing last Thursday U.S daily lean carcass average 211.97 lb. the week before 213.13.  At the first of May the average was 214.95 lb.

Our challenge to get higher hog prices can be directly attributable to where USDA average pork carcass cut outs are at.  A year ago they were 85¢ lb. last week they closed at 75.60¢ the highest they have been for weeks.

Below is cut-out chart comparing same weeks of 2017-2018.


Bottom-line Packers and Producers both getting less money now compared to last year.


Japan


Last week we visited with Japanese swine producers.  Some observations re Japan:


• Average slaughter weight 253 lb. (115 kg)


• The Japanese hog price is $1.66 lb. liveweight $420 U.S per 253 lb. (115 kg) market hog 


• Profit ranges from $80-100 plus per head


• Industry disease challenged by Prrs, Mycoplasma and significant amount of APP


• 90% plus Duroc Sired Industry


• Typical growth rate 175 days to 250 plus lbs. (115 kg)


• Producers need good productivity plus meat quality 


• About one million sows in Japan on 5,000 farms 


• Human population about 130 million 


• Most of industry family farms.  Largest producer is Inter farm 30,000 plus, next largest just under 20,000


• Labor an ongoing issue with little if no immigration to Japan, a guest worker program


• Most of feed ingredients imported


• Japan recognizes and pays for Pork that has higher quality.  That means more marbling and redder Pork.  Japan buyers pay more because consumers know these attributes means better tasting Pork.  All attributes our industry should remember when we see U.S Pork-Cuts are 75.60¢ lb. and Beef Choice Cut-Outs 227.41¢.  Pork 1/3 the price of Beef.  Sad testament to our lack of market and consumer awareness.

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This post was written by Genesus