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Jim Long Pork Commentary: US small pig price surges

04 December 2018
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

Both US cash early weans and feeder pigs surged higher last week as the market moved from a buyers’ market to a sellers’ market

It was only a few weeks ago both feeder pigs and early weans were in the teens. Last week the average USDA cash 40 lb. feeder pig jumped $13 per head from the week before to $65.18 while early weans jumped $6.00 to $54.07.

Part of the reason is some of the largest US production systems have jumped into the market looking for 10’s of thousands of small pigs. They need the pigs to fill existing finishing barns. They are short due to several separate reasons; disease (prrs, ped), seasonality, need to cover shackle space as new plants come on and the subsequent loss of production of some plants as hogs are lost to the new plants.

A feeder pig broker told us last week, “This market is difficult to figure with the rapid price acceleration. It makes it hard to keep up.” We heard of $70 plus early weans being sold last week for future delivery.

Weights

A year ago last week the National Daily Base Lean Hog weight was 216.62 lbs. per carcass. We note the first 4 days last week (Friday not reported) 212.70 lbs.

This year is 4 lbs. lighter than a year ago.

Tells us hogs are not backed up, to the contrary increased packer capacity has pulled hogs ahead. Couple this with slaughter running lower per head than USDA projections.

Our premise that there was no way 2 million more pigs were in September inventory looks more accurate.

We believed and wrote that there was no way 2 million more finishing spaces had been built when we saw continued strong demand for cash small pigs to fill in spaces in a traditionally low demand time period.

USDA September

Market hogs Inventory

Last week’s USDA slaughter; 2,548,000 a year ago; 2,547,000 (1,000 head difference) and weights lower year over year.

Trade Loss Estimates

The US pork industry has certainly sacrificed for US trade policy if NPPC projections are correct. Their estimate is tariffs from Mexico have cost $12.00 and China $8.00 per head, a total of $20 per head ($50 million a week) Big Money! Hopefully for US producers the new NAFTA Trade Pact signed Friday and further China Negotiations will lead to resolution. $20 per head is a huge difference.

Chlamydia

We are hearing in USA specific reports of Chlamydia affecting reproductive performance of gilts. Most of the reports are associated with Gilts not cycling. One incident we heard of only 4 gilts cycled out of 200. All reports are associated with specific genetic pyramids. If you are having issues on gilts cycling best to talk to your genetic supplier.

African swine fever (ASF)

ASF breaks continue in China. We expect it will not be brought under control. As we go forward we expect the implications of ASF will lead to strong prices in China with hog prices increasing 20-30 %. When that happens we expect more exports to China as their government will want to have adequate supply at prices consumers can afford.

A few weeks ago a veterinarian we know that works around the world including China said re: ASF
“We will find out if the world has enough pork to feed China.”

 

Image: Bob Nichols, United States Department of Agriculture

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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