Pig outlook - Lean hog futures bulls in command
Livestock analyst Jim Wyckoff reports on global pig news
3 February 2024
4 minute read
By: April lean hog futures this week hit a four-month high as prices have rallied sharply the past month. However, the futures market is now short-term oversold and due for a corrective pullback soon. Also, there are now strong overhead technical resistance levels that will likely find additional price gains more difficult. The latest CME lean hog index is up another 90 cents to $72.38 as of Jan. 30. The cash index has firmed $7.33 this month, with $2.48 of that gain coming the last three days. February lean hog futures finished Wednesday $3.97 above today’s cash quote, suggesting traders anticipate the seasonal strength will continue for at least another two weeks. But the nearly $12.50 premium April hogs hold to the cash index may be getting too extended.
Weekly US pork export sales
Pork: Net US sales of 42,900 MT for 2024 primarily for Mexico (13,400 MT, including decreases of 1,300 MT and 3,000 MT - late), China (12,600 MT, including decreases of 100 MT), Canada (4,200 MT, including decreases of 700 MT), Japan (3,100 MT, including decreases of 1,200 MT and 100 MT - late), and Colombia (2,600 MT), were offset by reductions for Costa Rica (100 MT). Exports of 30,100 MT were primarily to Mexico (10,700 MT), Japan (3,600 MT), South Korea (3,500 MT, including 100 MT - late), China (3,000 MT, including 200 MT - late), and Colombia (2,800 MT, including 300 MT - late).
China allows qualified pork imports from Russia
China’s customs administration began allowing the import of pork from qualified regions of Russia last week. Pork imports from regions of Russia without African swine fever are now allowed.
Review of USDA ‘product of USA’ labeling plan continues at OMB
The National Meat Institute (NMI) has already had a session with the Office of Management and Budget (OMB) on USDA’s final rule for putting in place a voluntary Product of USA label. Their session involved officials from USDA and the Office of the U.S. Trade Representative (USTR) and likely focused on issues raised by NMI in the comments they filed during the request for public comment on the proposed rule released in 2023. A session today will have Canada detailing their position on the final rule via Edward Farrell, a lawyer with the OFW law firm in Washington, DC, who advised Canadian cattlemen in their challenge at the WTO over the U.S. Country of Origin Labeling program. Another meeting is currently scheduled for Feb. 6 with the National Turkey Federation. It is unclear how much USDA’s final rule will have differed from the proposed rule released in 2023 but several U.S. meat industry stakeholders raised concerns about the rule and the potential impacts it could have on trade and other areas.
Bipartisan bill introduces new labeling rules for plant-based and cell-cultured meat products
A bipartisan bill introduced in both the House and Senate, known as the Fair and Accurate Ingredient Representation (FAIR) on Labels Act of 2024, aims to establish new labeling requirements for plant-based and cell-cultured meat alternative products. The bill, introduced by Sen. Roger Marshall (R-Kan.) in the Senate and Rep. Mark Alford (R-Mo.) in the House, seeks to ensure clear labeling for consumers, including terms like "imitation" and "cell-cultured" on product labels. It addresses concerns about transparency in food labeling, especially for products designed to resemble traditional meat and poultry.
The FAIR Labels Act introduces specific definitions for "imitation meat" and "imitation poultry" for plant-based meat alternatives. These definitions would apply to products that resemble meat but do not contain actual meat. The bill requires the use of "imitation" or similar terms on labels and mandates a disclaimer stating that these products do not contain meat or poultry.
For cell-cultured meat and poultry products, the bill establishes definitions and grants the USDA authority over their labeling. It requires the use of terms like "cell-cultured" or "lab-grown" on labels to clearly differentiate these products from traditionally farmed meat.
The bill has received support from various agricultural and livestock trade groups, who believe it will help prevent consumer confusion and protect the reputation of traditional meat products in the marketplace.
Plant-based meats accounted for 2.5% of retail packaged meat sales in 2022, according to the Good Food Institute.
China’s hog herd declines notably
China’s pig herd at the end of 2023 fell declined 1.8% from the previous quarter and 4.1% from a year ago to 434.22 million head, the ag ministry said. The sow herd dropped 2.3% from the previous quarter and 5.7% from last year to 41.42 million head.
USDA sends animal ID plan to OMB
USDA has sent a final rule to the Office of Management and Budget (OMB) on updating animal disease traceability regulations to require the Animal and Plant Health Inspection Service (APHIS) to only recognize identification devices as official identification for cattle and bison if the devices have both visual and electronic readability (EID). USDA has targeted finalizing the rule in April.
The next week’s likely high-low price trading ranges:
April lean hog futures--$81.00 to $88.00 and with a sideways bias
March soybean meal futures--$346.20 to $380.00, and with a sideways bias
March corn futures--$4.30 to $4.60 and a sideways bias
Latest analytical daily charts lean hog, soybean meal and corn futures
