Pork Commentary, October 13th, 2020
Jim Long, President-CEO, Genesus Inc.
Last week the U.S. sold 60,200 metric tonnes of pork. The highest amount this year and the highest since early 2019. We expect the closing of German exports to Asia due to ASF is giving underlying support. Last week China sales were 29,000 mt. the fifth-highest amount this year. We expect to see continued strong export sales over the coming months as Asian demand and loss of German pork pulls more sales to USA-Canada.
The miracle of the fall of 2020 continues.
On August 18th October lean hog futures were 51¢ lb. Last Friday they closed at 78.125¢. That’s a $55 per head appreciation. Going from losing $30-35 a head to a profit of $20-25. What a turn around. Not anytime too soon. Some producers who 6 weeks ago were ready to pull the plug now see a future.
So many were discouraged by the constant drumbeat of the chicken littles who were telling them the negativity of the futures. They were ready to give up.
Case in Point last week we received the latest Iowa Producer Magazine from Iowa Pork Producers Associations.
- Chicken Little 1 – “It’s shackle space that will dictate pig prices moving into the future, not the pig supply.” With that he said “it will likely be 8-10 quarters before the profit looks much better.”
Comment – No wonder producers were depressed and had little hope – 8-10 quarters?
- Chicken Little 2 – He also thinks “the pork industry doesn’t see a recovery until at least 2022.”
Two Chicken Littles preaching doom and gloom as recently as a magazine delivered last week.
The funny thing is our check off dollars get used for there “experts” to give us know nothing crap.
“Talkers are usually more articulate than doers, since talk is their speciality.”-Thomas Sowell
The Tragedy of Pork Consumption
Since the ill fated “Other White Meat”program was launched 20 years ago, pork per capita consumption has flatlined. This despite total U.S. meat and poultry per capita consumption increasing by 30%. The reality is our Pork Industry has lost domestic market share. This has led us to push for exports as an “opiate” for expanded pork production.
The “Other White Meat” program was a push to make us like Chicken. A cheaper product. It must be the only marketing program in the history of advertising that tried to compare your product to a cheaper option. Bizarre. Obviously, the “Other White Meat” program failed a billion dollars (Check off) of producer money went into this losing plan.
The quest to make lean lean like chicken took away marbling that leads to taste. Loins and hams that once led the pork cut-out in price now languish behind bellies, ribs, shoulders. The destruction of loin and ham values (half the carcass) has hurt the profits of our industry for years. Consumers vote with their money. Not only they have decided to buy more other meats and poultry, they are voting bellies, ribs and shoulders which have more marbling and better taste. This is what’s winning the consumer dollars and preferences. Big Taste is the driver for repeat consumer purchasing. It’s been calculated if each American ate pork one more time a month it would lead to 7 million more hogs domestically consumed. That would be reliable domestic consumption and not one dependent on the vagaries of exports and the political issues that affect its reliability.
It’s one thing to rail against what’s wrong, but it’s more important to find solutions to unlock U.S. domestic demand. We all are aware of the run away success Certified Angus Beef and what it’s done for beef consumption and cattle producers. Fortunately for the pork industry the National Swine Registry (NSR) has trademarked “Duroc” for U.S. meat case. The Certified Duroc Program will be an option for producers, packers and supermarkets to use a program that through legal verification can brand a product that like Certified Angus not be a niche product but one that resonates to all consumers.
The best part of the Certified Duroc Program is that NSR stringent legal trademark requirements ensure that only Verified NSR Registered Durocs can qualify for use of the Duroc label. This quality control measure will ensure purity of the Durocs that will deliver the Big Taste and Flavor. Unfortunately for some Genetic companies i.e. (PIC, DNA) what they call Durocs won’t meet these stringent NSR trademarked requirements.
It’s a bright new day. A vehicle from NSR to drive domestic demand through a universal available Duroc brand with quality attributes for taste and flavor. Genesus is proud to be a member of NSR and have a Certified Duroc that will deliver Big Taste and Flavor needed to enhance domestic demand. As an industry, consumer demand ignited by Big Taste and Flavor is a pathway to better profits.