Pork Commentary
Iowa – Southern Minnesota lean hog prices gained $2.50 per pound from Friday to Friday last week (Friday averaged $64.92). Weekly hog marketing’s were 2.161 million down 3.1% from last year. So far no week in 2010 has been less than 3% lower year over year. There is definitely fewer hogs now and in the future.
Other Observations
* Pork demand is improving. For the week of February 648,500 pounds of pork bellies were taken out. A year ago in the same week there was 1,402 put in storage. A year over swing of almost 1,900. This is strongly counter – seasonal. If this keeps up there will soon be few bellies in storage. The only way to slow demand will be higher prices. Hog prices will go up.
* Last week sow prices pushed higher. 450-500 pound sows reached $53.26, almost double from August during the H1N1 (swine flu) scare. Higher sow prices are a reflection of sausage demand relative to sow marketing’s. Higher sow prices will now allow some of the old sows that have been held for an extra litter to be sent to town. A 500 pound sow will now bring $266 this is more than enough to replace with a quality gilt. U.S.A. sow marketing’s the week of January 30 were 57,784 – a number that in our opinion shows no net liquidation. Sow prices will remain high over the coming months.
* Chicks placed for poultry meat production the week of January 10th were down 5 million from the same week a year ago. There is little indication of increased poultry production. This is positive for hogs.
* A further reflection of pork demand is the U.S. Pork Exports Preliminary Data we have seen indicates December was almost 15% higher than the previous December. The highest monthly year over year increase in 2009. On the whole in 2009, annual U.S. pork exports were down 8.3%. Year over year gains in December are being led by Mexico up 27% December to December and Russia is up 86%. What this tells us is the H1N1 scare is over, global demand is increasing and all of it points to stronger prices as we go forward.
* H1N1 seems to have fallen off the media radar. Thank Goodness!! The big scare turned into a sad joke. 40 times more people died of regular flu. The billions of dollars spend domestically and globally on vaccine was a big waste. Millions of doses of H1N1 vaccine sit begging for victims. Big Pharma, Their bottom line bloated by stupid media and politicians. The good news is the H1N1 (swine flu) debacle seems to have had little lasting effect on pork demand. While May to August U.S. pork exports during the height of the H1N1 scare were off 20%. In the last two months of 2009 pork exports were up 13%, a positive swing of 33%. You need to look no further than this statistic to see why lean hog prices were 50 cents in August and in the 60’s in November – December despite hog production 10% higher due to normal seasonal pork supply. As hog supply continues to fall in the spring strong exports will push hog prices higher. No one is afraid of the boogey man swine flu anymore.
* The U.S.D.A. is estimating that combined beef, pork, broiler, and turkey production for 2010 will be 90135 million pounds down from 2009’s 90598 and down a whopping 3.5 million pounds from 2008 (93586). 2010 will be the first time in over forty years that total U.S. red meat and poultry production will be down two years in a row. It is equivalent on a per capita basis per pound according to the U.S.D.A. of an 8 pound decline form 2008. (2008 215.9 pounds, 2010 207.9 pounds).
Total meat and poultry protein availability is a big factor why we are bullish on lean hog prices. Pork exports are recovering. Hog supply is declining. Overall, the domestic and global economies are recovering. Per capita income is absolutely proven to be a demand enhancer for pork consumption. The H1N1 (swine flu) debacle is mostly behind us. Roll all of these factors together and it creates a scenario that could lead to 90 cent lean hogs.
Genesus Announcement
We are pleased to welcome two new territory managers to the Genesus Team. Leighton Siemens – Manitoba Leighton joins Andrew Curry in expanding and enhancing Genesus’ sales and service in Manitoba. Leighton recently worked with his family in operating a large sow operation with all Genesus Genetics weaning over 25 plus pigs. Family includes Gaylene, his wife of 18 years, 12 year old son Trent and 8 year old daughter Savannah. They live in Morris, Manitoba where Leighton is President of the Minor Hockey Association. Leighton experience owning and running a highly productive sow operation with Genesus Genetics and his passion for the swine industry will be beneficial to all present and future Genesus customers. David Borsboom – Alberta, Montana, Saskatchewan Dave joins the Genesus Sale and Service team and will work in conjunction with Gerald Hoftyzer in Alberta, Montana and Saskatchewan. Dave, who lives in Coaldale – Southern Alberta, joins Genesus after ten years in the nutrition business, prior to that Dave managed swine facilities that were involved primarily in genetics. Dave strong believes in customer service along with his extensive experience in hog production and swine nutrition will be a powerful combination. Genesus welcomes Leighton and Dave aboard.
Categorised in: Pork Commentary
This post was written by Genesus