Global Market Report
As so many people have talked about, the cutout values are at record levels as compared to live hogs, and packers are making record profits. When slaughter numbers fall into next spring we should recover cash hog prices, as those packers have plenty of margin room to compete with each other. Until then, we are going to struggle. No one is needing extra pigs, and even the niche markets are turning them away.
The good news is feed cost are at levels we have not seen in a while. I do not see corn heading higher until next summer and that will take a weather scare. People are pointing to an increase in corn and bean exports as a sign that grains will move higher. I think what we are seeing is nothing more than front end loading. Foreign customers are getting products bought up before the dollar rises. The Feds have all but promised raising interest rate in December, which should increase the dollar’s value. As I was writing this, I read a comment from someone and simply put, “Exports is everything in a world market and a stronger dollar is not the exporter’s friend. A stronger dollar plus higher interest rates will challenge farm businesses that levered up over the last 5 years.”
If Trump follows through with his campaign promises, we should see massive deregulation. That should keep oil under $50 a barrel, so corn will likely fight to get much above $4.00, with a barrel of oil at those prices. All this points to corn markets that will remain sluggish. Of course, pork exports are going to be at the mercy of many of the same scenarios. Another issue with a stronger dollar is that Canadian imports of pigs to the U.S. will very likely increase.
COFCO Meats – Genesus ImportRecently, Genesus completed the successful export of two 747’s of registered purebred breeding stock to COFCO Meats. This is the largest single order to one company ever sent to China.
COFCO Meats is a listed firm belonging to the COFCO Corporation, China’s largest agri-business company. COFCO Meat is moving the Chinese meat industry to its next phase of expansion and modernisation. COFCO Meats currently has 190,000 sows in production.
The Genesus animals were sent by charter plane, and great efforts were undertaken by Genesus’ experienced export team to select and transport this combined order to China, while providing the best environment for the pigs along the way. The export process from Canada was supervised by CIQ (the Chinese animal health department) and CFIA (their Canadian counterpart), ensuring that only healthy pigs were sent to China.
Genesus has the world’s largest registered purebred herd, and is known for the most prolific genetics in the industry, as well as the leader in meat quality research and implementation. This made Genesus the perfect partner for COFCO, which has one of China’s largest fully integrated systems. Using the newly imported breeding stock is the fastest way to get the latest Genesus genetics into herds and helps our customers get more money into their wallets faster.
This post was written by Genesus