Last week, we were in Des Moines, Iowa at the World Pork Expo. Our observations:

• General attitude of attendees was good. We expect producers who are discouraged and negative do not want to attend trade shows.
  
• Main topic – corn, soybeans and feed prices. Many are afraid of where supply and prices are going. We heard people talking $8.00 - $10.00 a bushel corn. Fields are extremely wet – some land is not planted – it’s been cool. A bumper crop does not seem likely.
  
• Many are figuring that breakeven is $77.00 to $80.00 lean per lb. Iowa-Minnesota last Friday was 71.31. Many are losing money.
  
• Talking to builders at the Expo we could find few new sow units under construction or being contemplated. Much as we all would expect.
  
• We heard from some equipment suppliers that a 20 to 40% jump in steel was going to be soon reflected in their pricing.
  
• Producers seem to feel hogs have been growing real well in the cool weather. The same cool weather that is setting back corn soybean and growth is pulling hogs ahead. If we have pulled hogs ahead 3 days, that would be one million hogs. If we had marketed one million fewer over the last ten weeks prices and market psychology would be much better. We believe that some hot weather would lead to a rapid drop in weights. Such an event would be bullish for prices.
  
• The Chicken Little economists were in full flight at the Expo. Producers who heard them speak came by to visit us. Some needing medication. Others needed suicide watch. Why people subject themselves to such garble is beyond us. We were told that this collection of wizards were reaching $10 corn and continued swine industry losses for the next 18 months. Based on what, we don’t know. Wishful thinking? This same group who predicted in the first part of April, lean hogs of just over $60 lean for May.
  
• We heard of some traders recommending the clients sell all their remaining corn now. They feel the corn market has topped. Hope so.
  
• Mexican producers told us that in Mexico City hogs had reached 21 peso a kilogram up from 12 a couple of months ago. 21 pesos is 90¢ US a lb liveweight. One Mexican packer told us that the full liquidation in Mexico has not hit the market and that further supply decline is likely. These new prices are welcomed by all Mexican producers and will pull US pork into their market giving further support to US prices.
  
• At the Expo, we were talking to some Danish acquaintances. The hog price in Denmark this week jumped to 1.8 Euros per kilo. $1.10 US lean lb. Price supportive for US exports.
  
• Talking to several European acquaintances, the number of 1.5 million sows liquidated in Europe appears to be in line. The Euro grain crop seems to be in good shape at this time. There were suggestions that Europe would have reasonable feed supply relative to livestock needs. The 1.5 million fewer sows or approximately 25 million fewer market hogs will cut pork supply for export.
  
• US sow liquidation is continuing weekly sow slaughter over 70,000. Gilt retention is down. We believe 350,000 – 400,000 sows are gone from the North American herd. Seven million hogs fewer while sow liquidation continues. There were suggestions at the expo that shackle space availability could be a problem this fall. We wouldn’t bet the farm. Canada-USA weekly marketings will be lower this fall compared to last. There will be no shackle space problem.

Summary

Expo was well attended and organized. Producers are more fearful of feed prices than the hog market. Liquidation is ongoing. The higher the feed prices, the higher the liquidation will be. Cool weather has pulled ahead hogs. When the heat comes, weights and hog numbers will drop. Global hog prices are increasing as supply declines.