|Pork Commentary, September 9th, 2019|
Jim Long, President-CEO, Genesus Inc.
U.S. July Net Pork Exports Up 35.6%Some positive news for the U.S. pork industry is the increase in the Pork Exports and decrease in Pork imports in July. Some Points:China / including Hong Kong at 112.67 million pounds was up significantly. A year ago July China/Hong Kong U.S. imports 23.48. Up 380%Mexico imported 150.75 million pounds in July. The highest month since last October. Up 18% from last July.We need continued export growth. It’s good to see China’s increased imports. Now that China’s hog price has hit record highs. A true reflection of decreased supply, it is logical China will import more pork.
We understand face to face trade talks between USA-China will be held in October. It would be nice for both countries to come to a common ground.
Gene EditingBelow is the link to MIT technology review article on Gene Editing in cattle. It’s a wake-up call for all pushing to take Gene Editing oversight away from the U.S. Food and Drug Administration. It seems in the race to expedited Gene Editing there could be serious implications.
How much do we want to risk consumer Pork acceptance and demand with risky attempts at altering nature by Gene Editing and GMO’s? Click to learn more about: Recombinetics Gene Edited Hornless Cattle Major DNA Screw-up (English)
CanadaMeat Packers in Canada are asking for compensation from Federal Government due to China Import Meat ban. They are claiming $100 million in damages to date. This pales in comparison to the losses of production that have been suffered for many months from market damage due to China tariffs on U.S. Pork, lowering Canadian Market Hog Prices because of related U.S. basis prices. The Canadian Government should be matching the U.S. governments’ compensation of $11 U.S. per head to producers. Canadian producers have suffered at least the $11 that U.S. producers are being compensated. Many Canadian packers own hogs; the compensation to all producers would also help packers in this way as well. Even better get market opened back up to China!
China PricesLast week Average China Hog Market Price was 26.9 rmb/kg = $1.73 U.S. liveweight. Highest Price was in Henan Province at 32 rmb/kg = $2.06 U.S. lb. liveweight. There is no doubt China’s pork supply has fallen and will fall further. This from South China Morning Post quoting Chenjun Pan- Senior Analyst for Animal Protein at Rabobank. “Given the situation, we can expect the price to continue to go up at the same time, consumption to go down.” “This basic mechanism will help to slow down the ride in pork prices.” In our opinion there will be increased imports of pork and all meats to China.
The U.S. increase of Pork to China/Hong Kong in July is an indicator of what’s coming. China’s hog price has close to have doubled since July 1st. The need for imports continues to rise.