US Hog Margins24 February 2012
US - Margins continued to improve since the end of January, particularly in the second half of 2012 with historically strong profitability being projected for Q3 and Q4 which are now around the 98th percentile of the past 5 years, writes Doug Lenhart, General Manager for Genesus in USA.
The improvement stems mainly from an increase in deferred hog prices, with feed costs contained by an offsetting rise in meal and drop in corn over the past two weeks.
December export data continue to show strong demand for pork, with the US Meat Export Federation reporting 2011 pork exports totaled 2.255 MMT valued at $6.11 billion, breaking the previous volume record of 2.052 MMT and shattering the value record of $4.88 billion – both established in 2008. Year-over-year, pork exports were up 18 per cent in volume and 28 per cent in value, and equated to 27.5 per cent of total production when including both muscle cuts and variety meat. While this may be a tough act to follow in 2012, there is general optimism with improving economic indicators that demand will remain strong and pork competitively priced.
February’s WASDE report tightened the corn balance sheet with exports rising 50 million bushels due to a 4 MMT drop in Argentina’s corn crop. The soybean balance sheet was left unchanged, but it is clear that the US needs to harvest a large corn crop this season.
1st Qtr ’12 Most Recent Offering of $6.22, the low was ($4.22), the high has recently been $13.87 and the 5 year percentile of 94.2 per cent.
2nd Qtr ’12 Most Recent Offering of $13.96, the low was $2.42, the high has recently been $19.39 and the 5 year percentile of 93.2 per cent.
3rd Qtr ’12 Most Recent Offering of $13.16, the low was $1.20, the high has been $14.07 and the 5 year percentile of 98.8 per cent.
4th Qtr ’12 Most Recent Offering of $6.78, the low was ($0.14), the high has been $6.94 and the 5 year percentile of 97.5 per cent.
|Genesus Global Market Report
Prices for week of 13 February 2012
(per pound liveweight)
|Brazil (south region)||2.44
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