Jim Long Pork Commentary: future markets suck

Jim Long provides his latest commentary on the global pig industry and the latest futures market is not looking good. In Jim's words: "It sucks."

25 June 2019, at 3:27pm

We still believe it’s the calm before the storm. As China cleans out inventory in storage and market hogs there, pork supply is still reasonable.

It’s been said, “wait until the dog hits the end of the chain”. All producers we speak to in China expect the sow herd have and/or will decrease 50 percent. Down 15-20 million sows? China 15kg pigs are $155 US. Some of the cash hog markets now $1.20 US lb. Many if not all expect market hogs to reach 25-30 rmb/kg - or over $500 US/market hog.

There will be more pork going there. We expect beginning July-August to see the China price rocket higher. All hog producing countries will benefit from this demand.

Maybe we are the boy who believes there is a pony in the manure pile - too optimistic. But we are on the ground in China. When producers tell you we had 60,000 sows, now 6,000. When they tell you we budgeted for 11 million market hogs and hope to have 7 million. A feed company says nationwide feed survey shows tonnage down over 60 percent. It is striking; it’s not hearsay; it’s the owners telling us.

Genesus exported more breeding stock to China in the last three years than any other genetic company - about 35 percent of the market. The last import to China was last November and it was Genesus. It’s our business to pay attention. The demand and need for breeding stock in China will be monumental. ASF is still sweeping China and their pig inventory will continue to decline.