Pork Commentary, February 22nd, 2021
Jim Long, President-CEO, Genesus Inc.
We read in several places where some speculate lean hog futures are over-bought. We disagree.
Our reason is that the U.S. Pork cut-out price is in the low 90’s. This despite weekly kills of at least 2.6 million-plus until this past weeks weather hindered slaughter.
When you look at summer month lean hog futures in the 90’s, it’s not hard to believe this is not over-bought when weekly marketings seasonally should decline below 2.4 million.
In our opinion, the dynamics of lower supply due to sow liquidation and disease coupled with good demand will push summer cash hogs over $1.00.
“I do think all rich countries should move to 100 percent Synthetic beef”
Links below are articles about Bill Gates promoting the benefits of lab beef (meat).
It is always interesting to see self-serving elitist billionaires using their platform for social engineering. We always love the elite flying around on private jets with multiple homes talking about carbon footprints and how everyone else should live and eat.
Does anyone ever say “Bill we don’t care what you think.” So you made big money on software, you are part of the elitist 1% – that doesn’t make you an expert on everything. We as farmers are feeding the world, not software makers, there is more than enough food and we can produce more.
The issue is distribution of that food and who can pay for it. High-priced one percenter food from labs will not have the price or volume as the answer for food security.
U.S.D.A. is projecting:
- 2021 Corn crop year at 15.2 billion bushels compared to 14.18 billion bushels in 2020.
- 2021 Corn acreage planted 92 million, 90.8 million acres 2020
- 2021 Soybean crop year at 4.5 billion bushels compared to 4.14 billion in 2020.
- 2021 Soybean acreage planted is projected up 6.9 million acres, at 90 million acres.
Goes to show what higher prices does. A projected USA increase of (corn-soybeans) of 8.1 million acres. We expect the increased acreage planted will be seen all over the Northern Hemisphere- USA-Canada-China- Europe-Russia. Higher prices will find acres.
USDA projects 2021-22 $11.25 bushel soybeans, $4.50 bushel corn.
We are continuing to hear reports of major ASF issues in China. The hog price is still high but has declined slightly to $2.35 U.S. liveweight a lb. We expect the price pressure is from light hogs sent to market when ASF breaks (up to 18% of total slaughter).
In Russia and other countries when ASF strikes, pigs are killed and buried. In China they are sent to slaughter. It’s one of the reasons it will be hard to get ASF under control in China. The movement of ASF-positive pigs and then factor the illegal ASF vaccines that have failed and further spread the disease.
$265 U.S. 35 lb feeder pigs in China tell us all we need to know about supply-demand. Reports of 1.7 million sows slaughtered in China last three months certainly pressures small pig supply.
An observation. All these dead pigs in China will not be eating corn or soybeans. We expect China pork imports to be strong throughout 2021, supporting lean hog prices.