US Pork Exports Down 10 Per Cent: A Small Miracle

US, CANADA & CHINA - US pork exports were 10 per cent lower in February compared to a year before, writes Jim Long, CEO of Genesus in his Pork Commentary.
calendar icon 21 April 2015
clock icon 4 minute read

At 377 million pounds this year, a 38 million pound decline. In our opinion, a small miracle considering the US Pacific Pork issues in this time frame. When we look at the big picture a 10 per cent decline tells us that Asia wants US pork and as the ports get back to full speed we expect US pork exports to surpass a year ago.

Chinese domestic swine price last week was RMB12 per kilogram or 94.17 US cents liveweight per pound. Double the US liveweight price of 46.43 US cents. There is no way that capitalism will not push pork to China if ports and shipping get back to full speed.

  • This past week 52 – 54% lean hogs increased from 59.89 to 63.02 per pound, that is a 3-US-cent increase. We expect a relentless price increase over the coming weeks.

  • A year ago US lean hogs averaged 219.19 pound carcass, this year 214.52 pound, or about a 4.8 pound decline. No doubt we are pulling hogs ahead. At some point this dog is going to run to the end of the chain. When weights stop dropping hog marketings will decline and hog and hog prices will jump.

  • US pork cut-outs last Friday: 67.99 US cents per pound

  • US beef cut-outs last Friday: 257.79 US cents per pound.

  • The spread between pork and beef will narrow. No way is the price difference sustainable. Beef will be pulling pork higher over the coming weeks.

  • Avian flu is hitting turkeys in the US and Canada. Whole flocks are being destroyed. Not sure what it means to the pork market. Could be negative if some export markets close to US poultry. Flip side dead poultry means less meat available. Wildcard if it gets in poultry breeding flocks, the multiple effect of production capacity loss could be significant.

  • Grain watch has begun. As an industry we need feed prices to stay reasonable. We expect farmers being farmers, the acres will get planted. Then we watch the weather to see how our lives are affected. Last year the US summer was not hot. One result of that US hog weights and subsequently pork tonnage didn’t get pushed lower due to growth slow downs due to the heat.

Every year, Genesus recognises its customers who wish to participate in its 25-plus weaned for the calendar year. Many participate but many other do not want their names published. As the company has grown, we have more customers and production results have continually improved. This past year, herds over 25 weaned continue to exceed all other genetic companies. Genesus is very happy for its customers as the prolific results combined with better growth, carcass and health continue to put Genesus customers at the top of profit margins in any benchmarking system.

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