Genesus Global Market Report: July 17 USA Market Report

We have increased packing capacity coming up and that has been the talk of the industry. There has been sow expansion and will continue to see more as we fill this new capacity.
calendar icon 24 July 2017
clock icon 3 minute read

Looking forward I am very concerned that the industry has forgotten one thing, increasing the slaughter capacity for sows. The 2013 capacity was 20,000 head a day, in 2016 that capacity has dropped to 18,950. This appears to be something the industry is over looking and could become a problem down the road. With an increased sow herd and not adding any more shackle space to kill them that will change the supply and demand to favor those sow killers.

The plants processing butchers have enjoyed record profits and hence the building of more plants. I think it will be important to watch if we get some of the sow killers to add to their capacity. If they do not, I am guessing cull sow prices will be effected in a negative way. That will make it more costly to own those genetics that require 65% replacement rates to keep a viable herd. I think we need to challenge the industry to add to this capacity as it looks like that shackle space for those future sows will be tested.

As I write this Dec futures are above $65.00. That is break even for most producers. The 4th quarter is always a challenge for hog producers. I see this as a good starting point to market some hogs for that time period. Ratcheting up sales from here.

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