Allan Bentley, Sales & Technical Manager
According to Iowa State we have losses on the books for 12 continuous months in hog production. I am not sure, but I don’t remember 12 straight months of bleeding red ink. If the futures are indicative of the cash hog prices, we will have 4 months more of losses. Going forward after that though cash hogs should be responding to the fact sow slaughter year to date is 5.2% higher than last year. There are a lot of sow farms that are not at capacity. Why not? When losing $30/head being at full capacity is only losing more money. Being inefficient is actually a blessing. This is all going to change. We are going to see better prices in March and April. Getting there is the big hurdle. There will be less beef, less chicken and less hogs next year. I think the U.S.D.A. is dead wrong when they predict 2%-3% more pigs next year. We will see. Carcass cut-out values are above $100. That has healed up the packer margins. We are going to need those packer margins to encourage Saturday kills in the 4th quarter. As I looked at last Friday’s feeder pig reported sales, I noticed that a full 1/3 of the reported sales were Canadian weaners or feeder pigs.
I like this picture I took. I am not sure how many meat salespeople read this but here is food for thought. If dog food is $8.46/lb. That would mean a 200 lb. pork carcass would bring $1692 each. Loins on sale for $1.55/lb. and dog food is bringing 5.5 times that! That is ludicrous.
This post was written by Genesus