Pork Demand PhenomenalA year ago U.S. 53 – 54% lean hogs were 68.81 per pound. Last week they were 94.71 per pound that is about $35.00 per head higher than a year ago. $35.00 per head despite a U.S. weekly marketing’s of 2.323 million just 18,000 head lower than the same week a year ago. The big difference: DEMAND! World price points for pork is pulling product. China at $1.31 U.S. live weight a pound, Russia at $1.30, and South Korea at $1.75 are all tremendously price supporting for the North America market as exports roll there. U.S. pork exports will now get a further boost as last Friday Mexico agreed to end all tariffs on U.S. pork (had been put in place as retaliation over U.S. trucking policies). Mexico is the U.S.’s second largest export market for pork with almost $1 billion in exports in 2010. No duties or tariffs will make U.S. pork even more competitive in Mexico which should be price supportive for U.S. hog prices.
Tough Times for ChickenLast week Cagles Inc. poultry integrator based in Atlanta Georgia filed for Chapter 11 bankruptcy. They produced 1.72 million chickens a week. Surprise! Surprise! They cited ‘high corn prices and low chicken prices’ resulting in they reported to ‘losing as much as $3 million a month.’ U.S. chick placements were down 12 million last week year over year. Despite this 12 city chickens at $75.60 per pound are 4 cents a pound lower than a year ago. Think of pork demand. The same amount of hogs as a year ago but $35.00 per head better prices. Chicken has significantly fewer numbers and lower prices. Throw in higher feed prices and its little wonder chicken companies are losing big time. Pork has demand. Chicken is sucking air. Has the world hit the saturation on how much chicken it can eat and is ready to pay for? Sure are glad we got rid of the ‘Other White Meat’ slogan. Red meat is king!?
RussiaThis past week we were fortunate to attend the Canada – Russia Livestock meetings in Moscow. The meetings were lead by Canada’s Ag Minister Gerry Ritz and Russia’s First Deputy Prime Minister Zubkov. Genesus is the largest exporter of swine genetics from North America to Russia with 18 plane loads sent and being sent over the next few months. Russia was thanked at the meetings by Minister Ritz for extending current veterinary export certificates (Some of the toughest import health requirements in the world). Russia with live hog prices at $1.30 U.S. live weight a pound is obviously very short of meeting their own domestic pork needs. The industry is attempting to expand but limited capital and expertise makes expansion very slow. It will be a decade before Russia comes close to meet its domestic demand.
SummaryU.S. Pork Demand is historically strong, with prices in the 90’s and weekly marketing’s over 2.3 million. Thank goodness with $6.00 plus corn if we didn’t have strong prices we would be the chicken industry – losing money at a rapid rate. Chapter 11 bankruptcy is not sign of prosperity.
Genesus AnnouncementGenesus is pleased to announce that Paul Flint and Susan Wulf of Ames, Iowa will be moving near Krasnodar, Russia to manage Genesus’ New Registered Purebred Nucleus and Multiplication system (6,200 sows) with other responsibilities including sales and marketing. Paul Flint – Recently Swine Business Development Manager – Allflex USA. Previously Production and Marketing Manager Waldo Farms breeding company. Susan Wulf – Recently Sales Manager PigChamp Swine record keeping company. Previously Real State and Contract Administrator with Christensen Farms Sleepy Eye Minnesota and Swine Farm owner. Genesus is the world’s largest register of swine breeding stock. Purebred genetics are of paramount importance in the Russian market. Paul and Susan’s Russian responsibilities are very important for the development and education of Russian swine production personnel and the insurance of rapid genetic progress.
Categorised in: Pork Commentary
This post was written by Genesus