Jim Long, President and CEO Genesus Genetics

U.S. Slaughter Numbers Keep Low

This past week U.S. slaughter numbers came in 210,000 head less than a year ago. The fourth week in a row that U.S. slaughter has been considerably lower year over year. This past week, down 9% year over year, in the month of July down close to the 9%.

The U.S.D.A. projected in the Hogs and Pigs Report an increase of 2% year over year in the 180 lb. plus and 120 lb. plus categories. Hog weights have not increased in July staying in the 278 lb. liveweight range. Appears to us U.S.D.A. June 1 Hogs and Pigs Report has overstated inventory which of course has hurt prices for producers.

What’s the saying about most fearful words in the English language?
“We are here from the Government to help you.”

Other Observations

Packer-owned hogs which are significant numbers (Thursday, 163,000 per day) have dropped big time in weight the last few weeks; in May running in the 290s, last Thursday averaged 277.19 lbs. Tells us Packers need to pull their own hogs to keep plants running and meet commitments to supply retail, foodservice, and export agreements. We are heading into the fall with a market hog inventory very current.

Mexico

U.S. Pork Export Sales last week were 38,500 metric tonnes. A good number with Mexico leading the way up 28% year to date.
Mexico last week bought 24,000 tonnes higher than any week ever bought by China.

Europe

Europe is expecting the economic effects of recent decreased pork exports to China. Feeder pigs of 30 kg. (66 lbs.) are currently selling for average price of about 250 DKK ($40 U.S.), well below cost of production.

In Spain, hog price has declined from a record 1.55 Eur/kg. (84ȼ lb.) on June 10 to 1.29 Eur/kg. (70ȼ lb.) July 29. Much of the decline is related to the decrease in China imports and lots of pork throughout Europe.

We expect to see sow herd liquidation to continue in parts of Europe as hog prices relative to feed prices are putting many producers below cost of production.

Why bellies are nearly double the price of loins?

You ever ask the question why bellies are nearly double the price of loins? Consumers vote with their money. Last Friday U.S. Pork Cut-out Bellies $2.22 lb., Loins $1.13 lb. Our bet, the reason Bellies (Bacon) has a better taste. It’s not because it’s leaner.

If Loins brought the same price as bellies, the overall carcass value would go up by about $50. Seems like real money and a good reason to figure out how to make better tasting loins. We need to stop chasing pennies on the alter of costs when there are dollars in the upside of better-tasting product. We need to stop thinking like farmers and more like marketers.

Consumers paying way more for Beef. Why? Taste! The money can be got in the market with a better product. It is already.

Good news for producers waiting to get rid of some old sows.

Big Sows 90ȼ lb. Never been a better time to sell old sows and buy some gilts and have money left over.

NPPC still missing in action on CFAP 1 top-up.

Grains and cattle got their top-up in billions of dollars. Where is NPPC? Executives too busy cashing their big fat paycheques. Why do they care it’s just the farmers?

Need new dynamic blood to drive NPPC forward, having twenty years of flat line per capita pork consumption is no sign of success. Any other group would have been gone long ago with such mediocre results. The worst of it, they spend the NPPC dollars to tell us how good they do. It’s a Washington elite mindset. Sometimes you must drain the swamp.

Last week readers contacted us about what to do on CFAP 1. We answered – Call your Senators and Congressman and demand the commitment of CFAP 1 top-up be honored.