Allan Bentley, Genesus Sales, USA
I am going to piggyback on Jim’s earlier in the week comments. The estimates are 1.6 % less pork in the 4th quarter of 2022 than a year ago. Beef supplies in the next 1/4 are over 5% less than in 2022.
It has been a little underreported but bird flu is starting to raise its head. It is a little earlier than normal. I believe it is in Ohio and Minnesota. Of which, the latter is a very important state for bird production. I do not believe the bird flu in the western states ever went away this summer. Now let’s talk about Europe. France has bird flu and I believe it is also been found in the UK. As I write this and read about it, the very common discussion about bird production in Europe is this. “We are going to have to learn to live with it.” That tells me as eradication procedures have failed. I don’t claim to be an expert in raising chickens or Turkeys. I do know however that killing millions and millions of birds going forward along with lower pork numbers and substantial lower beef numbers coming is telling us that we will have higher prices coming.
The packers are not happy that they are not making any money as the product has fallen from summer highs. I can’t find any producer that is very sympathetic to their dilemma. This brings me to my econ 101 class 40 years ago. Lower prices will increase demand. The lower price should stimulate exports which have been lower this year. In my humble opinion futures are undervalued. I must say geo-political issues worldwide trump any kind of supply and demand issues. We can’t do anything about that as producers so concentrate on what we can do. Higher prices than what futures are showing will be in all our futures.
This post was written by Genesus