Pork Commentary, January 31st, 2022
Jim Long, President-CEO, Genesus Inc.
Last week was the Iowa Pork Congress in Des Moines, Iowa. This Congress is the largest of the state winter events befitting the state with the most swine in the USA.
As usual, well-organized event, a reflection of the professionalism of the organizers.
We observed fewer attendees than in past years. Probably a reflection of Covid issues and maybe biosecurity concerns related to PRRS and PED. The weather was not a deterrent to travel.
The mood of attendees was optimistic with the hog market having jumped from low 60’s to 80’s since first of January and summer lean hog futures over $1.00.
The current high feed price levels were a major point of discussion. Seems like general attitude is they are expected to stay high for a while.
Not much, if any, discussion about new sow or finisher barns. A builder told us no need for finishers when so many were empty. Construction costs continue to increase building/equipment. For a 5,000 sow farrow to wean unit cost is $3,000 per sow; cost for finishers $400 per head for a 2,400 head barn with no land cost included. We were also told the current value of manure production in a 2,400 head finisher as fertilizer is $50,000 ($6-7 per head value).
Talking to some Packers, they believe the Omicron issue was mostly past through their labor force. Daily slaughter increasing last week as it did confirms this.
Packers we spoke to aren’t seeing any indication of hogs backed up. Iowa / S. Minnesota weights of January 22, 2022, of 291.5 lbs; compared to a year ago of 291.6 lbs., would reflect the same.
There was much discussion of the coming decrease of hogs. Lots of empty finishers, small pig prices of over $70 for an early wean, $100 for a 40 lb. feeder. Much discussion of PED and PRRS knocking down production. Fact is no one knows what hog numbers will be the next few months but certainly all indicating less than a year ago.
Producers told us Packers were calling them looking for hogs. My father used to say “Who’s calling whom.” is a reflection of supply-demand.
Several producers commented they’re, thanks to us, about our push on NPPC to fight for CFAP 1 top-up. We all hope the new leadership at NPPC will begin to fight with more earnestness for the 60,000 producers, they represent.
Some discussion on pork quality, as producers recognize the loss of Pork’s market share, the price of Beef three times Pork, Chicken Breast selling for more than Pork Loin. We understand the National Pork Board is starting some Pork Quality initiatives. We support all producers’ ways to bring more value to Pork. Better tasting Pork is certainly a good place to go.
Seems to be chatter that one of the larger genetic companies is blaming ear-biting, tail biting, slow growth on the Duroc breed. We would suggest they go to a mirror, it’s not the Duroc breed with the issue. Improving has to be more than just a slogan. At Genesus we have the largest registered Duroc herd in the world. We see none of the issues that are being blamed on Durocs.
Producers optimistic, prices next few months look strong. We see little sign of expansion. Our perspective, lean hog futures currently at range of $1.05 is lower than what hogs will sell for at market time. We expect to see $1.20 plus.