Jim Long, President-CEO, Genesus Inc.

Mid-West Swine Conference Report

Last week we attended the Mid-West Swine Conference that was held in Danville Indiana, just west of Indianapolis.

Our Report:

  •  Producers in General are less than enthusiastic. Losing money as most producers are is not one to generate optimism.
  • The conference was well organized and had good speakers.
  • Joe Kerns from Kerns Associates spoke on the state of the industry. He Projected that hog marketing’s will drop below 2.5 million a week (currently 2.8) in the new year, which should help hog prices. He also Highlighted Packer Gross Margin at $70 per hog. About as good as it can get.
  • Made the observation that Corn Yields are down about 5% from last year, despite wet spring, late planting, dry July, wet fall.  What will happen to yields if there is good weather?
  • Joe Kerns is also expecting China exports to ramp up further in the near future supporting hog prices.
  •  We heard more at the Mid-West conference of more non-estrus issues on gilts. Seems not under control and a big problem for the poor souls that buy gilts delivered with the problem. This business is hard enough without buying gilts that don’t breed. 
  • We got the sense in conversations with industry people that packers are looking now for hogs to fill shackle space than they were in the previous few weeks.

Other News:

  • Canada can now ship Pork to China again. Canada was shut down in June from exports.  In the previous month of May, Canada exported 45,000 tonnes to China (equal to 450,000 to 500,000 carcasses). Late June until November, Canada put tonnage in other markets.
  • The China hog price in May was around $1.00 U.S. liveweight a lb. Last week Chinas Aug. hog price was $2.22 U.S. a lb. More than double from May.
  • We would bet that Canada’s exports will reach 45,000 tonnes again quickly. Any Pork that leaves North America and goes in the black hole of China’s feed needs is supportive to hog prices.
  • With African Swine Fever (ASF) in Poland only 60 miles from Germany, the risk to one of the world’s largest hog producer and exporter is very real.
  •  If Germany were to get ASF it will be a challenge to many countries including China to decide if they will accept Pork from Germany. Thousands of people and trucks travel daily back and forth from Poland to Germany. In North America we are weary of ASF but we have oceans in between. Germany and Denmark have millions of pigs moving around. The risk of ASF is a stark reality.
  • Last Friday China announced tariff waivers on some U.S. pork.  Details have not been released. This indicates China’s need for pork and their wish to ease trade tensions. More pork going to China supports hog prices.


If U.S. hog slaughter drops to 2.5 million a week down 300,000 a week from where it was last week, coupled with ramped up exports, we expect to see lower packer margins and stronger hog prices. Its simple arithmetic for those who think Packer Margins will stay high. Please look at this past summer. Lower Hog Kill, lower packer margin. 

Current 82₵ U.S. pork cut-outs are next to a miracle with 2.8 million hogs being slaughtered.  It’s a true reflection of demand, domestic and export. If U.S. hog slaughter drops to 2.5 million a week, where can Cut-outs go? 93₵? 

Hang on! There is a light at the end of the tunnel and it’s not a train coming.

Last August Soon after ASF broke in China, we quoted an industry person with experience in China and ASF in Eastern Europe.

“Now we will find out if the rest of the world has enough food to feed China.”

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This post was written by Genesus