Pork Commentary, March 23rd, 2020
Jim Long, President-CEO, Genesus Inc.
- Last week U.S. 53-54% lean hogs increased from 58.47 to 61.78 – $6.00 plus a head.
- Last week USDA pork cut-outs went from 69₵ to 80₵ lb. – $22.00 plus a head
- Latest U.S. weekly Pork Exports were 43,000 tonnes, down 4% from previous week’s record number (China 15,580 MT).
- U.S. Pork Exports continue to run almost double a year ago.
Summary
- Cash Hogs up
- U.S.D.A. pork cut-outs up
- U.S. Pork Exports circling record levels
- Pork Demand holding in face of Coronavirus challenge
Coronavirus (COVID-19) effect on Hog Markets
We picked some of the countries hit by Coronavirus and used the date of late January as the beginning of outbreaks.
South Korea January 22, 2020 2,393.00 Krw/kg. March 18, 2020 3,867.00 Krw/kg. China January 22, 2020 36.615 Rmb/kg. March 4, 2020 36.66 Rmb/kg Spain January 23, 2020 1.42 Euro/kg. March 19, 2020 1.51 Euro/kg. Italy January 23, 2020 1.65 Euro/kg March 19, 2020 1.50 Euro/kg.
Many of these countries already had high prices. Main point, it appears that demand has held as have already high prices.
Domestic demand for Pork has jumped
- Retail stores have been in many instances stripped of meat due to a combination of restaurant closures, hoarding, and more home meals.
- Saturday U.S. kill was 313,000 head, up from 184,000 a week ago, reflecting huge packer margin and demand for pork.
- Certainly, no sign Pork demand is slowing due to Coronavirus
Lean Hog Futures continue their gyrations
- Getting more and more disconnected from the fundamentals of the market.
- More and more we see Lean Hog Futures as a pox on our house.
- Every other swine market in the world functions without one.
- Most if not all hog markets don’t have to deal with instability that it creates.
- Most if not all other global hog markets are more profitable for producers than the one with a lean hog future.
Jan-Feb 2019 China Publicly Traded Companies hog sales versus Jan-Feb 2020
China has several publicly traded companies that report their hog sales. Below is a comparison between Jan-Feb 2019 and Jan-Feb 2020.
Company Sales Jan-Feb 2020 % change from 2019 Wens 1.4 million head – 65% Muyuan 1.395 million head – 31% Zhengbang .642 million head – 43% New Hope .553 million head +18% Tiabang .288 million head – 44% DBN .151 million head – 54% Aonong .115 million head +12% Tiakang .088 million head – 35% Tangren Shen .066 million head – 64%
- Certainly, fewer hogs marketed in general this Jan-Feb. We expect due to ASF and Coronavirus logistic issues.
- Last year on the first of February China’s price for market hogs was 12.23 rmb/kg.
(82.61₵ U.S. Liveweight a lb.). - This year Feb. first, China’s price for market hogs was 36.43 rmb/kg
($2.38 U.S. liveweight a lb.) - China is certainly short of pork.
Summary
It appears unlike many commodities and products, the Coronavirus issue has not depressed hog prices if anything they have gotten stronger.
Toilet paper demand, Lysol demand, and Pork demand are some of the few things that can say demand is better in the Coronavirus crisis.
Genesus Customer Testimonials
Mayfield AB, Canada
“Genesus works well for our bam. We need animals that are hardy, strong survivors. The sows produce lots of good quality pigs that are uniform.
The pigs grow well throughout the bam. We get lots more pigs to market than when we were with one of the competitors’ lines. The boars are good workers, produce fast growing pigs with good grades.”
Dabaco Group, Vietnam
“Duroc Genesus has great structure and impressive well-tolerance to Vietnam’s hot and humid weather conditions. The growth rate is impressive with an average of 1,000 gr/day (30kg to 110kg) with a
low FCR. Great meat quality – dark red color and tender with high marbling score..”
