Jim Long Pork Commentary, U.S. Packing Plants Continue to Increase Harvest, May 19th 2020

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Jim Long, President and CEO Genesus Genetics

Last week U.S. Pork Packers started to recover some production capacity lost to Coronavirus plant issues.

Weekly Harvests totals:

  • Week of May 1st – 1.553 million
  • Week of May 8th – 1.775 million
  • Week of May 15th – 2.103 million
  • Last Year May 15th – 2.352 million

It’s good to see a 500,000 head improvement in the last two weeks.

Observations

Packers have worked to get Plants operational and to greater capacity. Great efforts have been made to put in place enhanced employee safety measures to protect workers from Coronavirus.

With U.S. pork cut-outs Friday closing $1.10 lb. the Gross Packer margin for Packers reaching over $100 per head. This in itself is a huge incentive to harvest as many hogs as possible. From what we know the current gross packer margins are at record levels. For Plants not at capacity, it is a lost opportunity in these highly profitable times. There must be big pressure to get fully operational.

There is no doubt market hogs are backed up. We have read reports that some claim up to 10 million. We expect it’s currently give or take 2 million. It’s a lot and a big challenge to get current. We hope this next week increased packer capacity might get us to the same weekly harvest as a year ago.

There are efforts to get compensation for market hogs being euthanized. As far as we know that hasn’t happened. Some market hogs are getting euthanized how many is mostly a guess. No one wants to publicize this grim reality. In the meantime, sow herd liquidation is ongoing. It’s across the specter of the industry with some Pork Powerhouses being involved.

The USDA announced April 17th a Coronavirus compensation program for ag and hog production. No real details have been released; it is supposed to be soon. There is no doubt hog producers have suffered due to Coronavirus. Dirt cheap pigs and hogs have been crushing to most swine producers.

Summary 

We need to keep seeing increased hog harvesting. Up 500,000 head a week in last two weeks is right direction. Packers have huge financial incentive to get hogs through their plants with record Gross Packer Margins. We hope and are optimistic that harvesting numbers will continue to increase.

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