Pork Commentary, October 21st, 2019
Jim Long, President-CEO, Genesus Inc
|U.S. Pork Export Sales soared last week with 351,000 metric tons purchased. Of that number 152,600 tonnes were by China combined with the week before’s 142,200. |
China purchased 294,800 metric tonnes the last two weeks. Farmer arithmetic equates that to about equivalency of 3 million market hogs.
To say things appear to be heating up is an understatement.
The total collapse of China’s hog production base is leading to the need for massive pork imports. You only need to see the announcement by Tyson Foods and JBS, two major U.S. packers with a combined daily harvest of over 170,000 per day. They both announced in the last few days that they will not accept hogs in the future that have been fed ractopamine (paylean). China will not purchase pork fed by ractopamine. You don’t need to be an ag-economist to connect the dots on what’s happening.
Neither company wants to miss out on China sales- they both want to increase profits. They see it’s here- record sales to China last two weeks. We expect we are about to see a surge in hog prices in the not too distant future. The promise of huge pork sales to China look like they are now a reality.
To put the last weeks export sales in perspective- Total U.S. Export to Oct 10th, is 1.180 million metric tonnes. Of the 1.180 million, 210,900 metric tonnes were sold last week! We are at record breaking export numbers with not only China, but to Mexico, Japan, and South Korea pushing exports to record levels.
When you look back over the last 10 days, market hogs have gone up over $20 per head. This was despite weekly hog marketing’s at record levels. Its obvious demand must have driven prices higher.
We expect some buyers jumped in trying to get ahead of the reality of higher prices coming.
Below is chart on U.S. Meat Export Federation- It says it all!
China Price Update
|China National Average Market Hog Price||36.4 rmb/kg = $2.33 U.S. liveweight a lb.|
|Highest Hog Price in Guandong||41.5 rmb/kg = $2.65 U.S. liveweight lb.|
|Retail Pork Price||40-44 rmb/kg = $2.60 – $2.85 U.S. lb.|
|Pork Belly Price||Pork Belly Price|
60 rmb/kg = $3.84 U.S. lb.
LEMAN CHINA SWINE CONFERNCE
As the world’s largest and most influential swine industry event, the Allen D. Leman Swine Conference was founded in 1985 and has a 34 years history. The conference was introduced into China in 2012. Leman China is now considered one of the most valuable meetings in the swine industry through providing scientific solutions to the complex challenges facing the swine industry.
The 8th Leman China Swine Conference & 2019 World Swine Industry Expo was held on October 19-21, 2019 in the Zhengzhou International Convention & Exhibition Center.
Swine experts from North America, China, and Europe presented the latest information and scientific solutions in swine production. Much focus was given upon ASF and best practices to deal with the epidemic. It is expected this year’s Leman China has drawn about 6,000 participants.
Genesus exhibited at this year’s conference and Expo and found much interest in Genesus products and services as the Genesus Brand name has become quite famous in China.