Jim Long Pork Commentary, Market Observations, May 7th 2018

397

Jim Long, President and CEO Genesus Genetics

 

Last week the U.S. cash hog market continued its recent advance, with 22 days in a row of increased prices.  Last Friday 53-54% USDA lean carcass average 61.96¢ lb.  Last week the U.S. marketed 68,000 more then a year ago (+2.8%).  More hogs, similar prices.  Last year U.S. summer lean hogs rocketed into the 80’s.

  • Last Friday USDA pork cut outs put the wholesale carcass value at 69.29¢ lb.  A carcass of Choice Beef 600-900 lb. $2.27 lb.  Beef three times the price of Pork.  If there was ever a time to S.O.S the Pork industry its this reality hitting us in the face.  The solution better taste – flavor from more marbling and redder pork that the USDA and National Pork Board is trying to get done, but its like pushing a chain uphill, producers need to get pushing to bring more demand to our product.
  • First four months of 2018 (Jan-April) U.S. national lean hog price has averaged 65.83¢ lb.  Last year first four months 66.44¢ lb. (-0.9%)
  • U.S. slaughter Jan-April 2018 40,393,000, 2017 39,256,000 (+2.9%)
  • First four months of 2018 U.S. early wean pigs have averaged $48.77 each last year same time $43.17 (+13%), 40 lb. feeder pigs have averaged $79.33 this year, last year $69.23 (+14.6%).  More demand, despite more pigs.

Of note, Ribs, Butts have increased in value.  Also, products with the most marbling have the highest individual values Ribs, Butt and Belly.

Despite more hogs this year but probably because of greater packer capacity, U.S. gross margin for Packers has decreased 4.24¢ lb. or about $9 per head first four months of 2018 compared to 2017.

Canada

Canada Hog slaughter Jan-April down 1.5% year to date.

Year to date small pig sales from Canada to U.S. down 6.7% or 100,000 fewer.

Canada Jan-April hog prices down 7% 1.54¢ kilo 2018, 2017 1.66¢.

Canada – fewer Hogs to market, fewer small pigs exported, total of 240,000 less slaughter and exports year to date 2018 compared to 2017.  Less isn’t more.

China

China Hog producers are currently losing on average 10 RMB/kg or about 270 RMB per hog.  ($43 USD per head).  This is leading to sow herd liquidation.  China Ministry of Agriculture inventory reports a 370,000 decrease April last year to this April.  We expect further rapid liquidation in the coming months if losses of current magnitude continue.

Vietnam

Last week we were with Genesus customers from Vietnam.  Market conditions have been terrible the last 15 months.  Losses per head reached $70 U.S. per head.  This lead to massive sow herd liquidation with estimate of 800,000 to 1.1 million sows going out of production (statistics are not accurate).  All feed is imported.  Current Vietnam prices of 39,000 Vnd/kg liveweight or 78¢ lb. U.S. liveweight is about breakeven.  Vietnam had the largest financial losses of any country last year; part of this was caused when China closed the border to Vietnamese pork.

France

French Fight back!  France’s position on alternative fabricated plant based so called meats.  An article from the National Post.

France, however, is not having it:  the Western European nation is fighting back against the rise of plant based protein providers.  According to the BBC, meaty terms such as bacon, steak and filet are now no-goes in France when it comes to describing any foods not derived from animals.  French MPs voted in favour of prohibiting food producers from marketing plant-based foods such as vegetarian sausage, “chicken” pies and “ham” slices, saying that such terms are misleading shoppers.  Defying the ban will result in fines of $470,000.

“It is important to combat false claims.  Our products must be designed correctly: the terms of #cheese or #steak will be reserved for products of animal origin,” tweeted French politician Jean-Baptiste Moreau, who put forward the measure.

Moreau, a farmer and member of President Emmanuel Macron’s La République En Marche party, reportedly based his argument on last year’s European Court of Justice ruling prohibiting the use of words like “milk” or “butter” to describe dairy alternatives.

Its good to see the French battle to save the name of our products.  It would be wise if other countries follow their lead.  Plant based products should create their own name’s, not be able to use real meat terms.  Let their products stand on their own not piggyback our real products.

Next week we will be at the British Pig Fair – Genesus UK exhibit.  We will report our observations.


click for more releases

Genesus Welcomes

Lance Dunbar as our Technical Service Director

Lance grew up on an Illinois family farm with diversified livestock including a breed to finish swine  operation. He has worked with swine farms ranging from 800 sows to the largest production systems in the world.

Most recently Lance served as an Associate Director of the Carthage Systems. This coming after seventeen years managing systems for Carthage.

Lance lives in Berwick IL with his wife Michelle and his 3 children. He loves the outdoors, fishing, gardening, and  beekeeping.

Contact information for Lance Dunbar

P: +1 309 536-1294

E: ldunbar@genesus.com

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here