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Pork Commentary: US Lean Hog Price Keeps Increasing

20 May 2015
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

US - A month ago, the US lean hog price was 62.31, a week ago last Friday 77.14, while this past Friday closed at 81.85 cents per pound. That is a 20 cents per pound increase in the last four weeks. We continue to be on the path to 95 cents plus, writes Jim Long, President-CEO Genesus Inc.

China

The April Chinese Government Inventory report released last week indicates China liquidated 1.7 per cent of their sow herd or 685,000 more sows in the month.

The China breeding herd is now down 14.9 per cent from a year ago or 7.2 million sows.

China’s breeding herd liquidation has now surpassed the combined sow inventory of USA – Canada.

China’s cash hog price is now $1.04USD/lb. (14.27 rmb/kilo) up from US 88 cents per pound a month ago. The current US cash price at 60 cents per pound means US hogs are $110 per head lower.

There is no way US and EU pork is and will not be filling the void of China’s pork needs. We expect China’s market price to reach $1.25 USD a pound liveweight in the next couple of months as decreased hog production hits the market.

Spain

We had some visitors from Spain at Genesus this past week who produce large numbers of hogs. We discussed the ramifications of China for Spain export opportunities. (Spain fourth largest swine producer in the world).

We all expect China to pull pork from Spain to China. The void China will have cannot be filled by only North America, and Brazil committed most if not all their pork exports to Russia.

New Plant

Triumph – Seaboard announced plans last week to build a new slaughter plant to open in 2017. 3 million a year capacity, in Sioux City, Iowa. Excellent news as this indicates faith in the future of pork production.

COOL

WTO has ruled US Country of Origin Labelling is illegal. Canada – Mexico can now potentially put on tariffs to recover the over $1 billion in damages. We expect the US will alter the law as the tariffs go beyond pork and beef.

Global Market

If you read this column regularly, I would suspect you see how we come to our market price thoughts from our interaction with Genesus customers around the world. Markets are all interconnected.

Spain will export, they are looking for better meat quality, and the Korean’s who visited last week have market hogs getting $450 per head, you know there will be pork imported. We operate nine nucleus farms in China; we see and hear how bad the market has been.

It does not take a brain surgeon to figure the liquidation of 7 million plus sows in China means they have been losing money and it is a matter of time there will be a heck of less pork and feed needed.

Russia has been closed to pork and live pigs from Europe. The end of next week we go to Russia and we will report our observations.

The Global aspect of our business is also necessary to drive Genesus’ investment in nucleus scale and genetic development.

We need many markets and the consequential sales to carry these huge costs. Some Genetic companies have proven they are no longer genetically competitive, and when this happens, they merge or just fade away.

Desperate times make for desperate actions. The Global Swine Genetic Industry is now six legitimate participants. Genesus plans to be “The Last Man Standing”.

To do that we need to continually add strong professional swine people and have rapid technological advancement.

Genesus is pleased to announce the addition of seven new employees and agents all formerly with JSR Group of Companies (Topigs-Norsvin).

  • Paul Anderson, formerly International Sales Director JSR (Topigs-Norsvin) now International Sales Manager Genesus.
  • Simon Grey, former Director JSR Checkfarm will now be responsible for Genesus Europe, Russia and former CIS Countries as Genesus General Director.
  • Natalia Zarubina was JSR-Checkfarm in Russia will now be Sales Support coordinating Genesus business in Russia and former CIS countries.
  • Olena Miller has joined Genesus from JSR (Topigs-Norsvin) and will be focusing on the sales growth for Genesus in Russia, CIS countries and Lithuania.
  • Yolanda Hou worked with JSR (Topigs-Norsvin) in China, as International Key Account Manager is now Genesus Sales & Technical Support Executive for business in China.
  • Jack Wozny, formerly JSR Checkfarm manager will now be operating a Genesus Sales Agency in Russian and the EU.
  • Dr Ayodele Christopher Oniku of Continental Genetics Ltd. Of Lagos, Nigeria, which marketed JSR (Topigs-Norsvin), will be working with Genesus to promote growth in the 15 countries of ECOWAS (Economic Community of West Africa States)

The Swine Genetic Industry is quickly consolidating.

Genesus is excited to have this strong group of Swine Professionals join the Genesus team.

Genesus is committed to not only produce the best swine genetics today but also in the future. The choice of this group to join Genesus is a testament to their faith in the value and commitment that Genesus brings globally to our customers.

Author: Jim Long, President & CEO, Genesus Genetics

To find out more about Genesus Genetics,
please take the time to visit their website at
www.genesus.com.

The opinions expressed in this commentary are entirely those of the author and can not taken to represent the views of ThePigSite.com, its owners or its management.

Top image via Shutterstock



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