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U.S Hogs and Pigs Report More Pigs!

05 July 2017
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

The USDA released the June 1st Hogs and Report last Friday. Lots more pigs! 2.2 million more markets. This will lead to almost 100,000 more hogs per week for plants year over year in coming 5 months.

Simple Arithmetic March to end of May – 3% more farrowing’s – 1% bigger litter = Pig Crop 4% greater year over year.

There is no doubt there will be more hogs in the coming weeks. Packers will continue with excellent margins, as packing capacity will be challenged until the new plants come on stream. The multi million-dollar question is start dates for Seaboard-Triumph in Sioux City and Hadfield in Coldwater, Michigan.

Since last fall two new plants have come on stream. Moon Ridge in Missouri (3,000 capacity head per day) and Prime Pork in Windom, Minnesota (capacity 6,000 head per day). Put these together and new capacity is currently about 50,000 more per week. The other two plants in Sioux City (10,000 a shift) Coldwater (10,000 a shift). When all up and running 160,000 a week single shift capacity. 2 shifts pushing 300,000 a week capacity.

One thing interesting is the June 1 breeding herd was 6.068 million. The breeding herd on December 1 – 6 months ago was 6.090 million. If correct the U.S breeding herd is 20,000 smaller then 6 months ago. Not exactly a number indicating sow herd expansion.

Demand

Pork Demand is strong with Pork cut-outs last Friday $1.03 lb. We are being helped by strong Choice Beef cut-outs at $2.25 lb.. Beef is more then double the price of pork. This is certainly helping pork demand and prices. Lean Hog Prices averaged 87.30¢ lb. last Friday. Farrow to Finish hog producers at this price should be making $50-70 head range. Its good.

We find cut-out values tell a real story. By Price a lb. Belly (Bacon) 198.17. Rib 141.24. Butt 109.42. All parts of any carcass that have significant fat which leads to flavor. Loins and Hams used to drive carcass value but now only Loin 94.64. and Ham 74.85. Loins are half the price of belly. What does this tell us. Consumers like the taste – flavor of Pork that has more fat-marbling. Prices of each cut-out value is driven by demand. In the past Loin and Ham have been the highest prices of the pork cut-out. As our industry became obsessed with lean and took out the marbling the pork cut-out flipped with Belly-Ribs becoming the highest value per parts. Consumers vote with their money. When are we going to get what consumers want? Its staring us in the face.

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.



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