Jim Long Pork Commentary, Hog Market, Compared to a Year Ago, October 28th 2019

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Jim Long, President and CEO Genesus Genetics

 

Sometimes it pays to look at where we are compared to a year ago. 

  • National Daily Base Lean Hog Price -53-54%

    • October 24, 2019_64.50 ¢ per lb.
    • Oct 26, 2018_63.72 ¢ per lb.
  • This past weeks hog slaughter – 2,693,000. 

    • A year ago same week 2,563,000 or plus 5%

  • Pork Cold Storage- September 30 up 2% from a year ago

    • 598,899 million pounds compared to 589,403 in 2018

  • Year to date Sow slaughter on September 30

    • 2018- 2,242 million

    • 2019- 2,235 million

    • Almost no change

  • U.S.D.A cash average 40 lb. feeder pigs

    • This past week $44.

    • A year ago same time $40.

Our Observation:

More hogs to market (plus 5%) this year compared to last, but hog prices the same, reflecting better pork demand. Pork in Cold Storage and sow slaughter showing almost no year over year difference, while 40 lb. feeder pigs are 10% higher year over year.

Of note- last year feeder pigs went from the $40’s to $70’s by mid-December.  We expect a similar scenario this year.

Below is U.S. Direct Feeder Pig Chart

China Update

We spent some time last week with a company from China. They have about 60,000 sows currently. Last week they said they were selling market hogs for 43 rmb/kg., which is $2.75 lb. U.S. liveweight. We asked them how high they thought market hog prices could go, they replied, 60 rmb/kg., which is $3.84 U.S. liveweight a lb.
If that happens a 260 lb (120 kg.) hog would fetch $988 U.S.

Hard to believe, but then again no one thought the price would get where it is now.

No doubt you can see why JBS and Tyson decided to pull Ractopamine (paylean) from feed the last two weeks so they could ship to China.

Over the next few months total pork exports from U.S. will set unprecedented volume levels filling the hole cracked by ASF in China, South Korea, Viet Nam and the Philippines.

Get acquainted with the
Global Mega Produce

A program of recognition led by National Hog Farmer sponsored by Genesus Inc.

Muyuan Group 

Muyuan Group is recognized as a Global Mega Producer for 2019.

 

Muyuan Group was established in 1992, its main business is hog farming (accounting for over 99% of its total revenue) which has been developed in coordination with other businesses including feed processing, swine genetics, hog slaughtering. Currently the total asset of Muyuan Group is 55.3 billion yuan with more than 40,000 employees and more than 150 subcompanies. The hog farming business covers 93 counties in 14 provinces all across China.

The subsidiary company – Muyuan Foodstuff Co., Ltd was listed in the stock market in January 2014, its current market value is over 150 billion yuan. In 2018, the company marketed over 11million hogs.

Facing with the severe situation caused by ASF, Muyuan Group has been dealing with it in a positive way and continuously groping for good experience and practice for prevention and control of ASF, which has resulted in a fast recovery and even further expansion in the number of sows in their production system. It is estimated that by the end of 2019, their sow inventory will reach 900,000 head.

Let’s congratulate on the great achievement and all recognize Muyuan Group as an industry leader and 2019 Global Mega Producer.

Photo from left to right: Yaping Gu-GM for Genesus China; Lyle Jones- sales direct for Genesus China; Li Yanpeng-production director for Muyuan Group; Tian Fangping-Technical consultant for Muyuan Group

www.genesus.com

 

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