Pork Commentary, March 15th, 2021
Jim Long, President-CEO, Genesus Inc.
- July Lean Hog Futures closed last Friday at 99.47₵. Last August 12th they were 74.60₵. That’s a $50 per head jump.
- U.S. 40-50lb composite feeder pigs averaged $90 last week. They were $15 last August.
- 500 lb. sows were 80₵ lb. last week. In mid-August, they were 25₵ lb. That would be $250 plus per head increase.
- Weekly National Lean Hog price last week 83.5₵ lb., last August 35₵ lb.
- Gross Packer Margins (re. DTN) was $50 per head mid-August. Last week DTN calculated $35 per head Gross Packer Margin. $35 is close to 3-year average this time of year.
Note to Chicken Little Economists who predicted more hogs in 2021 than 2020. Year to date U.S. hog slaughter 26,702,000, year to date last year 27,746,000. Unless producers have decided to keep hogs as pets there is a million less hogs (-3.8%) year to date.
We are now 10 weeks into 2021. We doubt there will be surge of hogs to surpass 2020. Every hog that is going to market in 2021 has now been bred (10 months breeding to market). There are less sows today in production than 10 months ago. No way there isn’t less hogs through 2021.
The latest U.S. weekly sow slaughter was 66,237. At this level probably liquidation, but for sure showing no expansion.
Historically high-priced feed like we have now hasn’t been conducive to herd expansion.
We certainly have seen prices increase in the U.S., but also in Europe. This is important for both areas to compete in the world pork export markets.
Jan 7, 2021 March 11, 2021 SpainLiveweight 1.10 Euro kg.(61.29 U.S. lb.) 1.36 Euro kg.(73.32 U.S. lb.) GermanyCarcass 1.19 Euro kg.(66.32 U.S. lb.) 1.50 Euro kg.(80.44 U.S. lb.) U.S.A.Iowa-Minnesota 49.27 U.S.D lb.carcass 87.24 U.S.D. lbcarcass
Brazil Crop Agency Conab is projecting record soybean production of 135.1 million metric tons. Last year 124.8 million tons.
Brazil corn crop is forecasted at 108.1 million tonnes up from last years 102.5 million. Acreage planted was up 0.5% on Soybeans, up 2.1% on corn than initially projected.
When you have high prices like we do in corn and soybeans more acres get planted – abracadabra more corn-soybeans.
Next big question is what will happen this spring in the Northern hemisphere for planting. USA-Canada-China-Russia-EU-Ukraine-India. As farmers we all know that plantings will be aggressive, that’s what farmers do. Farmers are the same in every country.