Jim Long, President-CEO, Genesus Inc.
U.S. Pork Exports Soar
U.S. Pork Export Sales soared last week with 351,000 metric tons purchased. Of that number 152,600 tonnes were by China combined with the week before’s 142,200.
China purchased 294,800 metric tonnes the last two weeks. Farmer arithmetic equates that to about equivalency of 3 million market hogs.
To say things appear to be heating up is an understatement.
The total collapse of China’s hog production base is leading to the need for massive pork imports. You only need to see the announcement by Tyson Foods and JBS, two major U.S. packers with a combined daily harvest of over 170,000 per day. They both announced in the last few days that they will not accept hogs in the future that have been fed ractopamine (paylean). China will not purchase pork fed by ractopamine. You don’t need to be an ag-economist to connect the dots on what’s happening.
Neither company wants to miss out on China sales- they both want to increase profits. They see it’s here- record sales to China last two weeks. We expect we are about to see a surge in hog prices in the not too distant future. The promise of huge pork sales to China look like they are now a reality.
To put the last weeks export sales in perspective- Total U.S. Export to Oct 10th, is 1.180 million metric tonnes. Of the 1.180 million, 210,900 metric tonnes were sold last week! We are at record breaking export numbers with not only China, but to Mexico, Japan, and South Korea pushing exports to record levels.
When you look back over the last 10 days, market hogs have gone up over $20 per head. This was despite weekly hog marketing’s at record levels. Its obvious demand must have driven prices higher.
We expect some buyers jumped in trying to get ahead of the reality of higher prices coming.
Below is chart on U.S. Meat Export Federation- It says it all!
Graph source: www.usmef.org
China Price Update
|China National Average Market Hog Price||36.4 rmb/kg = $2.33 U.S. liveweight a lb.|
|Highest Hog Price in Guandong||41.5 rmb/kg = $2.65 U.S. liveweight lb.|
|Retail Pork Price||40-44 rmb/kg = $2.60 – $2.85 U.S. lb.|
|Pork Belly Price||60 rmb/kg = $3.84 U.S. lb.|
China’s hog price is 5 times higher than the hog price in the U.S.A.
No wonder exports are taking off.
This post was written by Genesus