Genesus Global Market Report: United States market report

Alan Bentley of Genesus provides the latest update on the US market.

8 July 2019, at 4:30pm

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United States market report

A bit of irony as I write this on Independence Day and the local parade is a block away. Also 2019 is the year of the pig in China. I think it will be the year of the pig for many producers as China becomes more dependent on the US for their pork needs.

In the last 12 hours I read a report that said:

BEIJING (Reuters) – “The number of fresh outbreaks of African swine fever in China has dropped this year and pig production is slowly returning to normal, its vice agriculture minister said, amid suspicions that the full extent of the disease is not being reported.”

Two hours later I read this in Bloomberg:

“China will continue to import pork from the US and other countries as the spread of African swine fever reduces its domestic herd and tightens meat supply in the world’s largest consumer according to a senior Chinese agriculture ministry official.”

Just two hours after that I read:

Hong Kong (CNN) “The Chinese government issued a rare admission of failure Wednesday, saying that there had been 'weaknesses' in the handling of an African swine fever epidemic which has now spread to all of China's 25 provinces.”

12 hours, 3 different outlets and 3 different Chinese officials with three different stories.

So how is the futures market to digest conflicting information from China? It can’t. Jim Long has made clear his view and opinions. The few connections I have with China confirm what Jim has been saying.

China will downplay this as to not have to be over a barrel in these negotiations with the US. The longer this goes the more leverage with the US they think they have. I disagree and I don’t think they have dealt with a “Trump” or his style ever before.

These markets will turn around and we will see a profitable pork production sector. After all, we did our part to ramp up production and continue to supply the world with the pork they want. The packers have built the plants to accommodate these larger flows. Now the governments needs to get their job done and let us sell our pork to not only China but the rest of the world.