We are usually accused, and rightfully so of being optimistic. We are guilty! We can’t help it that is what we are. Anyway, the following is a roundup of optimistic items in the swine industry.

• USA consumer’s pork demand is year over year up 4 per cent (January – September 2009). Pork is up while chicken is down 2.9 per cent and beef is down 2.3 per cent.
  
  
• December corn has dropped from $4.03/bushel on 22 October to closing last Friday, November 6 at 3.67/bushel. That’s a decline of 36 cents a bushel in two weeks. Breakevens to produce hogs are lowering.
  
  
• June 2010 lean hogs closed on 19 August at $66.10 while last Friday 6 November, June 2010 hog futures closed at 75.925 putting 10 cents on the market or about $20 more per head. That is $20 everyone needs.
  
  
• 53-54 per cent National Daily lean base lean hog carcass was 56.47 last Thursday, 5 November. A year ago it was 56.71. For a long time we had hog prices significantly lower year over year. They are now the same.
  
  
• Cash early wean pigs last week averaged $34.12 with some reaching $40.00. It’s a reflection of returning optimism, higher lean hog futures and a shortage of good quality weaned pigs. It’s not if but when early weans will push beyond $50.00. 90 days ago some cash early weans were $5.00 each. The surest cure to low prices is low prices.
  
  
• USA latest market sow slaughter is 66,000. We are still liquidating. There will be fewer hogs next fall. No doubt.
  
  
• Liquidation continues in Canada with Hytek – Canada’s largest pork powerhouse supposedly depopulating give or take 14,000 sows. There are reportedly 300 hog producers in Canada having applied for Canada’s Government Transition Program. This is a commitment that in return for Government money you keep your facilities out of production 3 years. There will be fewer sows in Canada’s future on top of the almost historic liquidation that has already happened.
  
  
• The USA – Canada breeding herd in the latest combined report shows we are down 525,000 in the last two years. Fewer sows means fewer pigs.
  
  
• The intention of China to begin to allow again pork imports from the USA is positive. Even if it’s only 1 per cent of US pork production its price positive to get pork out of the US domestic market. With China’s domestic hog price around 95 cents US lean per pound, there’s a good chance pork is going to China.
  
  
• Since May, Pork Exports to Mexico have been up 38 per cent in volume year over year. We expect exports to Mexico to remain strong in the foreseeable future due to massive liquidation that has happened to Mexico’s swine herd. This is positive for lean hog futures.
  
  
• The lean hog price is currently the same as it was in some point of this past summer. We are marketing 200,000 hogs more a week than in the summer. There sure has to be better demand if prices can be the same with 10 per cent more pork a week.
  
  
• The latest USA – Canada market hog inventory indicates 2.25 million fewer hogs than a year ago. That’s 85,000 fewer hogs a week on average over the next 6 months. We will see higher prices year over year.

Summary

Fewer hogs are coming. Prices are recovering. Lean hog futures are improving. Feed prices are down. Early wean prices are gaining strength. We expect another $5.00 at least on summer lean hog futures. We know it’s still tough with many losing around $25.00 per head but there is a glimmer of hope. This is the dark before the dawn.