Jim Long Pork Commentary: hog market, compared to a year ago

Sometimes it pays to look at where we are compared to a year ago.

1 November 2019, at 4:30pm

National Daily Base Lean Hog Price - 53-54 percent

  • October 24, 2019 - 64.50 ¢ per lb.
  • Oct 26, 2018 - 63.72 ¢ per lb.

This past weeks hog slaughter – 2,693,000.

  • A year ago same week 2,563,000 or plus 5 percent

Pork Cold Storage - September 30 up 2 percent from a year ago

  • 598,899 million pounds compared to 589,403 in 2018

Year to date Sow slaughter on September 30

  • 2018 - 2,242 million
  • 2019 - 2,235 million
  • Almost no change

USDA cash average 40 lb. feeder pigs

  • This past week $44.
  • A year ago same time $40.

Our Observation:

More hogs to market (plus 5 percent) this year compared to last, but hog prices the same, reflecting better pork demand. Pork in Cold Storage and sow slaughter showing almost no year over year difference, while 40 lb. feeder pigs are 10 percent higher year over year.

Of note - last year feeder pigs went from the $40’s to $70’s by mid-December. We expect a similar scenario this year.

US Direct Feeder Pig Chart
US Direct Feeder Pig Chart

China Update

We spent some time last week with a company from China. They have about 60,000 sows currently. Last week they said they were selling market hogs for 43 rmb/kg., which is $2.75 lb. US liveweight. We asked them how high they thought market hog prices could go, they replied, 60 rmb/kg., which is $3.84 US liveweight a lb.

If that happens a 260 lb (120 kg.) hog would fetch $988 US.

Hard to believe, but then again no one thought the price would get where it is now.

No doubt you can see why JBS and Tyson decided to pull Ractopamine (paylean) from feed the last two weeks so they could ship to China.

Over the next few months total pork exports from US will set unprecedented volume levels filling the hole cracked by ASF in China, South Korea, Vietnam and the Philippines.