Pork Commentary, December 6th, 2021
Jim Long, President-CEO, Genesus Inc.
U.S. Pork Cut-outs last Friday closed at 81.47¢ lb., down to the lowest level for quite a while.
Last week’s U.S. slaughter 2,667,000, down from a year ago 786,000 (-4%). U.S. slaughter continues to run below a year ago.
U.S. Beef Cut-outs – Choice closed Friday at $2.74 lb. Beef carcasses are now 3.4 times the value of Pork carcasses. Obvious consumers prefer Beef as they pay several multiples more than Pork. Someday our industry will realize consumers will pay for taste and start producing Pork that has a better eating experience.
This past week I was with Ukrainian producers. We were in a retail store looking at Pork. We were comparing Genesus Pork featured in-store vs. other Pork. A lady walked up to buy. She bought the Genesus Pork at a higher price (French cut boneless pork chop). Asked her why and her answer “It tastes better.” A better eating experience will drive demand and price all over the world.
In Ukraine, hog price is 79¢ U.S. a lb. liveweight. A strong price compared to many countries currently. Profits running about $30 U.S. per head. Ukraine has had issues with ASF which has cut production. This has contributed to stronger hog prices. Ukraine has large grain production. No need to import feed. ASF limits the ability to export Pork as many countries have banned ASF positive countries Pork imports.
China National Hog price last week was 18.19 RMB/kg. It was 11.5 RMB/kg on October 7th. The increase is $1.15 U.S. a kg or about $140 per head. A strong indication of the drop in pig production in China. Our premise is “No one pays more than they have to.” We expect China’s hog price will continue to rise as the huge liquidation of sows due to terrible financial losses over the last eight months comes to fruition.
U.S. exports to Mexico achieved a new weekly record in the last report of 19,770 metric tonnes. China purchased 12,390 metric tonnes. As China’s hog price continues to rise, we expect U.S. exports to move higher. The U.S. has many slaughter plants approved for China exports. Canada and the EU have many plants not approved.
NPPC New CEO
The National Pork Producers Council has hired a new CEO. His name is Bryan Humphreys. Let’s hope he can initiate a Common Sense Revolution. It was time for a change. The NPPC has failed to deliver the results that a 60,000 producer industry deserves. Beef, Dairy, Corn, Soybeans received billions in CFAP 1 top-up that was promised by Ag Secretary Vilsack to the Pork industry. NPPC has failed to push to get CFAP 1 top-up for producers. Let’s hope Mr. Humphreys can get the results and at the same time get fresh blood that works for Pork