Pork Commentary – June 10, 2013 – World Pork Expo Report

Pork Commentary

Jim Long President – CEO Genesus Inc.

June 10, 2013

________________________________________

World Pork Expo Report

  Last week we attended the 25th World Pork Expo. Our observations:
  • We have attended all 25 World Pork Expos. The industry has changed. The Expo has significantly fewer exhibits now compared to 25 years ago. Sign of the times, fewer people to look after fewer producers.
  • The Expo was well organized. NPPC team and their associates do well organizing the venue and events in a far from ideal venue. (Infrastructure).
  • Producers who attended that we talked to were relatively optimistic. Lean hogs reaching towards a $1.00 lean a lb. certainly shows good demand while giving producers a chance to make a little money.
  • To be clear, “relatively” optimistic. Many producers have lost significant money over the last while, no one was dancing any jigs of joy.
  • A number of people congratulated us on nailing the market with our belief $1.00 lean hogs plus and were commenting on us staying on message when the “Chicken Little” Economists had the summer sky falling when the market struggled in March. Eg. University of Missouri, 85¢ this quarter. We thought Missouri was the Tigers…not Chicken Littles.
  • Several producers told us that they were getting over $200 per market hog and over $1.00 with premiums. USDA Daily Slaughter Data last Thursday had the Highest Net Lot at $1.067 lean a lb.
  • Lots of talk at Expo about Smithfield’s sale to Shuanghui. Most producers think it is positive for industry, as it should increase pork exports to China. Some believe it’s a sign that China doesn’t believe it can buy feedstuffs and raise hogs as efficiently as Smithfield can. Some thought it’s an indication of the world’s globalization while others didn’t like a US company being sold to foreign interests. Lots of opinions but overall Smithfield’s sale is viewed as positive.
  • Talking to feeder pig brokers they tell us small pig supply is not as abundant as last year. Also that there are probably more empty finishers than you would expect this time of year.
  • The PEDv scour has hit over 100 herds. It is widespread geographically. Acts like TGE, at about 3 weeks of pig production die in farrowing crates, a few weeks of crappy pigs. No doubt fewer hogs this fall from this disease. It appears no knows how it broke or how it moved so fast around the country.
  • South Korea is a major pork importer. The domestic herd has been repopulated since Foot and Mouth hit 2 years ago. Korean visitors at Expo told us losses per head are currently reaching $90 per head there. That’s nasty.
  • Chinese Producers are kind of apprehensive about Smithfield’s purchase. They too expect the purchase will lead to more pork being exported from the USA to China. Chinese producers expect this will dampen their own domestic prices.
  • Crop Report – It was wet in Iowa. Most if not all of people told us their corn was planted. Some land flooded. All agreed drought was over. In retrospect it didn’t seem as wet as we thought it would be.
  • Our industry is counting on a good corn crop to get our cost of production down. There is real hope that there will be a good crop. The recent rainfall and delayed plantings have people nervous. It will be an interesting summer as we all watch the crop develop. We need a “Goldilocks” moment. Not too much rain, not too much heat, we need it just right.
Print Newsletter 🖨

Categorised in:

This post was written by Genesus