Jim Long, President-CEO, Genesus Inc.

U.S. Hog Prices Stay Strong

Some Observations:

  • Weighted Average National lean price stays strong at $1.07 a lb.
  • U.S. Pork cut-outs last Friday closed at $1.22 indicating strong demand.
  • Hog slaughter, surprise surprise, seems to be running lower than USDA projected, this past week about 240,000 head lower than a year ago (-10%).
  • Weights do not seem to be increasing despite significantly lower slaughter numbers in July. Running at 278 lbs., still down 5 lbs. from last year.
  • Cash early wean pigs at $40 are a reflection of lower supply and good demand. Last year at the same time were $8. The 5-year average this time is $20. Historically, cash early wean prices bottom in August, then begins to increase.
  • Cull sow price has jumped significantly to 90¢ lb. for heavy sows. Appears to be good demand for sausage products pushing up sow prices. Maybe sow slaughter slowed down but seems confusing as depops for PRRS continues. Maybe the continued increase in sow mortality (due to prolapses) and zero value sows is eroding ongoing sow cull supply. Dead sows and shot sows don’t go into pork supply.

African Swine Fever

Germany has had its first break of ASF involving commercial pigs. There have been over 1,000 instances in wild boars. The issue continues to impact German swine market by cutting export opportunities. German producers are receiving about $50 less than Spanish producers. There appears to be an ongoing reduction in Germany.

China reported 337.42 million hogs slaughtered in first six months of this year. Up 34.4% from the corresponding period a year earlier. The average weekly slaughter would have been 13 million head this year. The big question to us is, how much of the extra slaughter was light pigs or decreased slaughter weight?

Zhengbang, Muyuan, and Wens combined 5.6 million sows, according to World Mega Producer Report, announced they have dropped slaughter weights from 140 kg (310 lbs.) to 120 kg (264 lbs.) a decrease of 20 kg or 44 lbs. That’s about 3 weeks of growth. They probably dropped the weight due to high feed prices, ASF, and hog prices that have dropped significantly. If this was a trend over the whole industry that could have pulled ahead 40 million hogs?

Statistics we have seen had 18% of all hogs under 200 lbs. (90 kg) going to market in China. That too would have contributed to high slaughter in first half of year.

ASF is still a big challenge in China. One of the World Mega Producers recently announced they had lost 100,000 sows to ASF. Another one was aware of eliminated 80,000 sows. Another 30,000 sows farm lost 20,000. The truth, in the end, will be the market price. We expect an increase in China’s hog price will be coming in the next few weeks as supply drops from first half weekly numbers.

Where is CFAP 1 Payment?

NPPC seems to have no answer to the question “Where is CFAP 1 payment promise to Pig Producers?” Cattle got it; Crop Farmer got it? Pig Producers second-class citizens? Where is NPPC? Where are their wins? Why have they not asked producers to engage with Government, Senators, Congressmen? It’s a great time for change as the current Executives who can’t get it done are leaving. Great opportunity to clean house and get leadership that doesn’t believe pork per capita consumption that has flatlined for twenty years and has lost market share is Good! America wasn’t built on steady. The people who produce hogs every day deserve to get better results from executives pushing half a million a year in compensation. Good riddance, let’s hope the producers who are the directors of NPPC can find the right leaders to drive our industry forward. We have a great opportunity to grow our industry but we need leaders at NPPC that believe in going forward.

“I will go anywhere as long as it’s forward.”

David Livingston

Categorised in: ,

This post was written by Genesus