We don’t need a computer, or need to be an ag–economist to figure that if USDA is correct that in 2016 we will have 3 billion pounds more meat and poultry, we will have our hands full (mouths full)?

The USDA is projecting almost 213 pounds per capita disappearance 10 pounds more than 2014. We had better be getting exports increased and sure, the heck don’t need any more vegetarians! The sheer volume of poultry and red meat coming will be challenging.

Red Meat & Poultry

Production Million Pounds

Other Observations

• Sow market is picking up big sows now bringing over 65¢ a big bump compared to a few weeks ago. Selling sows, buying gilts is a good cash flow scenario right now.
  
  
• Cash US early wean pig price is recovering from the $15 per head a couple months ago averaging about $37 last week. At $37 most, if not all producers should not be losing money. $15 was not if you were losing; it was how much a head. Going forward we suspect the price to continue to rise. One early wean broker told us last week that he expects early weans to reach $60.
  
  
• The US corn harvest is in full swing. For what it is worth all the producers, we have talked to are relatively happy with their yields. Some have the best yields ever. December corn at $3.76 close Friday night have little traction to increase unless the US dollar declines relative to other currencies.
  
  
• We do not sense a strong push for expansion in Canada or USA. The relative fear of low prices and the deluge of meat coming is holding most expansion in check. In Canada there is if not zero expansion then next to zero. In the US incremental expansion but nothing like in the 90’s when 100’s of thousands of sows were placed in new facilities. Now that’s over and we suspect will never happen again.
  
  
• Packer margins remain strong – US Pork Cut–Outs 88¢ per pound – Market Hogs 70¢ per pound. Packers have a good margin. We remain positive that the 88¢ per pound reflects strong pork demand. Last week 2.3 million hogs went to market. The strong US pork cut–outs in the face of so many hogs should help hog prices when market numbers decline seasonally.