Pork Commentary

Jim Long President – CEO Genesus Inc. info@genesus.com

Our Week Was Interesting

November 23, 2015

This past week we had an interesting week travelling in Texas, Colorado, Kansas, Oklahoma, and Arkansas.
  • Monday Night – Texas – tornadoes within 8 miles from where we were staying. Rained hard in area where it never rains.
  • Tuesday Night – Western Kansas – Colorado Border – blizzard. Got the opportunity to stop and stay in a Motel built before Colour TV! That night I was happy that it was still operating.
  • Wednesday Night – Wichita Kansas – 1:37 AM Earthquake – shook Hotel and its windows, 4.0 strength centered in Cherokee, Oklahoma.
  • Thursday Night – Thank goodness on the plains and no mountains with volcanoes.
In between all the quasi perils, we were able to see lots of the country and several swine operations. It was a good week. Other Observations
  • Western Kansas and Texas – Milo piled outside at almost every elevator, there was a big crop. Harvest is done from what we can see except for one cornfield North of Wichita.
  • Everywhere we went, producers are conscious of where the hog market is now. There is edginess and all are looking at ways to improve their cost of production.
  • Producers are certainly seeing the collapse of Soybean Meal prices. In July $350 per ton, now down to $283.
  • Lean Hog Futures had a recovery this past week with December up $2.65 Friday to Friday. Unfortunately, 57.45 a pound lean is still a losing proposition.
  • US hog marketings last week were 2.4 million down from 2.243 million a year ago same week. We believe this is the first week this year that weekly marketings are below previous year. In September 1st USDA Hog and Pigs Report there was an indication that weights between 50-119 pounds was up 3% year over year. Under 50 pounds had no year over year difference. We expect that we are now marketing hogs in the weight range of Sept. 1st inventory that was 50-100 pounds. We expect year over year hog numbers to be similar going forward and that will be positive for the hog market.
The Following is a Chinese News Release China restores pork import from US, Canadian Plants [03 November 2015] China has restored permission to import pork produced after October 16, 2015 from 28 meatpacking plants and cold storage warehouses in Canada and the US, according to a posting by AQSIQ, China’s quarantine authority. China prohibits ractopamine, a drug used to help pigs gain muscle, and pork producers were banned from exporting to China unless they could prove that their pork was ractopamine-free. AQSIQ listed the facilities – 14 US pork producers, eight US warehouses and six Canadian facilities-by plant number on its website. A number of US producers had previously qualified to export pork to China under the ractopamine-free protocol, including several operated by Smithfield, which is owned by China-controlled WH Group. The opening and permission to this many players in our opinion and direct reflection of Chinese Government recognition for their country’s need for pork imports. China’s current hog price is 16.34 rmb/kg liveweight or $1.16 USD per pound. Pork is an important part of China’s population diet. China has a GDP per capita of about $8,490 USD per capita. At $1.16 a pound, pork is an expensive proposition for the average Chinese person.  

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This post was written by Genesus