Allan Bentley – US Sales, Genesus Genetics
- During March the lean hog index lost $14.00, that is $10.00/ cwt on a live basis.
- June futures lost about $8.00 during the same time
- April futures declined by $15.00 during March.
This is in part the result of politics crossing the same road that we are trying to get pigs down.
The U.S. Pork Industry has become a pawn in the political spectrum; tit for tat between the U.S. and China. Unfortunately, it looks as if the pork industry is going to take most of the beating in this political fight. China combined with Hong Kong are the number two importers of pork from the U.S.
The issue with China is they import a lot pork offal. These products do not get consumed in the U.S. or many other countries.
Over the years we have seen loin prices remain steady, but bellies and offal prices have increased. With by products now a larger portion of the total carcass value, and our main customer of that product putting a 25% tariff on, we have a problem.
The last hog report showed a record number of hogs for this time of year so will definitely not help this situation improve. I have stated before, that even with the extra packing capacity, we must sell the meat.
Exports are going to have to get us through this and we may have lost a big player. What to watch for, is how much pork gets funneled through Hong Kong to China, or as far as that goes, to any other country.
I anticipate that Hong Kong will help feed China’s appetite for American Pork. In the long term I think this will all get resolved but that does not mean we won’t be feeling the brunt of this battle in the short term.
This post was written by Genesus