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Pork Commentary: Hog Markets on Launching Pads?

by 5m Editor
22 April 2009, at 8:31am

CANADA - This weeks North American Pork Commentary from Jim Long.

Friday to Friday, the Iowa – Minnesota lean hog price went from $54.61 to $59.61, up $5.00. That would be an increase of about $10.00 per head in one week. It’s what we need – the hog price has to start rolling. We expect the price to relentlessly move higher in the coming weeks.

USA Pork Exports Up?

February USA pork export were up year over year. 4.7 per cent in value. Good for supply of demand isn’t it. The total value of the USA pork exports in February were valued at $368.2 million. Pork plus variety meat exports of 158,471 metric tonnes (349.3 million pounds) was 57 per cent higher than February two years ago. Isn’t it interesting the doom sayers who have continually told us pork exports will drop significantly due to the lack of demand because of the global recession. Thankfully, they continue to be wrong. We have repeatedly expressed the opinion that USA pork exports would hold close to a year ago. We have based this on the higher price of hogs – up to 200 per cent higher, we see in most countries that import pork. We expect pork exports to hold relative to a year ago as liquidation in other parts of the world ( Mexico, European Union, Brazil, Australia, Japan, South Korea, etc...) will continue to keep their domestic hog prices high an pull in USA pork.

Total Meat and Poultry

We remain optimistic that we are going to see hog prices appreciably higher than the current lean hog futures indicate. One of the reasons is the decline in all meats and poultry production in the USA.

Latest Weekly Data (million Pounds)
2009 2008 Difference
Pork 434.9 453.2 -18.3
Beef 473.1 500.3 -27.2
Chicken 844.9 925.5 -80.6
Turkey 132.2 136.6 -4.4
Total 1,885.1 2,015.6 -130.5

130.5 million pounds less meat and poultry per week than a year ago. That’s about 3,500 tractor trailers of meat protein. Give or take a line back to back of tractor trailers 40 miles long. That’s a lot of meat! The last year beef, pork, chicken, and turkey production was down year over year at the same time was 1975. 49 years ago. The hog price in 1975 set a record high (1975 was also a time of economic recession).

We are in unchartered waters. Global hog prices remain high. USA pork exports remain good (higher in February than the year before). All poultry and meat supply is down. The only way to ration limited supply is higher prices. Hang on, we believe the market is on the launching pad.

Eagle Creek Grand Opening


Mike Van Schepdael, V.P. and Jim Long, President-CEO of Genesus present an Award to Evergreen - Eagle Creek for weaning over 30 pigs per sow per year in 2008.


Nedap Feeding Stations

We had the honor to speak at the open house of a new Genesus multiplier last week. The new facility built in Manitoba by Evergreen Colony – a twenty year Genesus customer is called Eagle Creek. The new Eagle Creek facility in our estimation is one of the most advanced swine facilities in the world.

The attention to detail, workmanship, and maximum use of technology is extraordinary. The facility includes Nedap Group Sow Feeding System, Crystal Springs Lift Farrowing crates and large pen nurseries. Of course no facility, no matter how modern or efficient can maximize its production capacity without the people that each and everyday execute the basics of swine production. Evergreen – Eagle Creek have proven management’s ability to deliver excellent production results. In 2008, Evergreen accomplished the lofty standard of 30 pigs weaned per Genesus sow in the 12 months of the 2008 calendar year. This was accomplished in a swine facility that was over 15 years old.

Joe Waldner, Minister at Evergreen – Eagle Creek wisely kept this wonderful new facility in perspective. Speaking to almost 1,000 open house guests, he reminded all that their success in production and the achievement of building such an extraordinary building could not be accomplished without the Grace of God, and His blessing.

The new facility is a testament to the long term dedication and confidence Evergreen – Eagle Creek have in the swine industry. For us it is an uplifting experience to be chosen as a genetic source by such a wonderful group of people that are Evergreen – Eagle Creek. We are all fortunate to be in an industry where there are so many people of character, honor, and respectfulness.