June Lean Hogs reach 99.95!

Last Friday June Lean Hog futures reached 99.95!  The market is now beginning to realize there was no expansion to get more hogs to market by next summer.  With feed costs about $100 per head farrow to finish.  The $100 spread from $1.00 lean hogs and $100 feed cost is really, really nice after the too many months of financial losses.

 Other Observations

USDA cash early weans averaged $56 last week, cash 40 lb. feeder pigs $72.54. We expect to see $70 early weans and $100 plus feeder pigs.  Farmers hate empty barns.  The empty bar space will continue to chase pigs.
  • Sow prices continue to stay strong with 500 lb. sows bringing 66.71¢ a lb. or almost $335 each.  Sow marketings of 57,000 a week is not a low number.
  • Hog weights are running about 5 lbs. heavier than a year ago.  This tells us producers are pushing up weights as feed prices have declined, also we expect we have slowed down hog marketings.  This past week US hog marketings were 105,000 fewer than the same week a year ago, continuing a trend that has been occurring the last seven weeks.  Year to date the US has marketed 1.3 million fewer hogs than last year.
  • We expect the hog supply will soon start to be impacted by PED that hit in May.  In our opinion in the coming weeks marketings will continue lower year over year.  We expect Lean Hogs will be in the 90’s plus through August of next year.
  • US Corn harvest is progressing.  We continually hear reports the yield is better than most expected.  Corn prices at life of contract lows seem to be verifying the good harvest.

We Can’t Help It.

We will write about what’s going on in the Swine Genetic business.  We can’t help it!  It’s our business.
  • This past week Genus-PIC closed on the purchase of Genetiporc.  There is one less competitor now as industry consolidation continues.  Now Genus-PIC must begin the nasty work of cutting $11 million per year in synergies they have promised their shareholders via their own press release.  The only way possible to accomplish this goal in our opinion is to cut staff and overhead.  This could include geneticists, sales people, logistics, accounting and management.  As we say, nasty business.
  • We are expecting higher genetic prices for Genetiporc customers as PIC price point is more aggressive.   Genetiporc at times were the cheapest breeding stock in the market.  Pic will help pay the $40 million purchase price with higher margins on Genetiporc and PIC customers.
  • Last week we wrote about the new Genetic company DNA which is the new name for the old Danbred North America.  We had some unhappy DNA people.  They didn’t really disagree in what we wrote.  They just thought we shouldn’t say it.  Old Company – becomes a new Company and with a press release declares a new genetic product with new characteristics.  We called it “Abracadabra Genetics”.  They didn’t like the characterization.  The point we were making is a press release does not make new genetics!
  • Last week Danbred in Denmark in a press release reiterated their commitment to North America.  We understand plans had been in the works for months for Danbred to enter North America with another dealer to compete with what was existing.  We expect this was part of the incentive for the creation of DNA genetics.  That was a smart move.  They probably had no desire to continue promoting Danbred and a new dealer benefit from its brand development.  New Danbred will take years to re-establish itself in North America.  In the Danbred press release this past week they announced their goal to be number 2 in the world.  Tough to do with no North American Market?


Feed prices down.  Hog Prices seasonally strong.  No sign of expansion.  This past week June lean hog futures hit 99.95.  The sun will be shining for the next 10 months.  Time to make hay!

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This post was written by Genesus