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Jim Long Pork Commentary: US hog market gets a boost

There was some life in the US hog market last week with October lean hog futures gaining $5.71.

24 July 2019, at 2:08pm

Pork carcass cut-outs closed Friday at $78.53, higher than it has been for a while. Last Friday, Iowa-Minnesota hog price averaged 75.01¢ lb. With August lean hog futures at 83.875¢ Friday, the cash hog market needs to get some giddy up soon. If we hit 83-84¢ it will do a lot for the financial wherewithal and attitude of producers.

Packers have next to no gross margin (ie Cut-outs $78.53 – Iowa – Minnesota 75.01). The new and larger packing plant capacity has eroded margins. We expect that packers' hope has increased and a fall in hog prices will help gross margins.

NPPC – gene editing

The National Pork Producers Council has recently launched a new campaign to broaden awareness and understanding of gene editing promises in swine genetics. The NPPC is all in for gene editing. They don’t want the safeguard and oversight of the US Federal Drug Administration, they want the USDA to take the lead.

  • In Europe gene edited products will be by law genetic modified organisms (GMO) and subject to all of the GMO rules
  • The first gene edited pig was developed at the University of Guelph (Canada) 20 years ago. It was called Enviropig. The pig population was maintained for over 20 years. No packer would sell the meat. None were eaten. The herd has since been destroyed. The technology worked, but there was no market.
  • We asked a packer a week ago if they would want to use gene edited pigs – answer: “Hell no”
  • Paraphrasing the Vice President of McDonalds at NPIC 2018: Don’t expect us to explain GMO – gene editing”. When the world’s largest restaurant chain gives a warning, it's a good idea to pay attention. They have 14,000 restaurants worldwide.

Plant-based meat is here and our reply is GMO or gene edited pork? That’s not taking the natural high ground. Antibiotic-free pork, gap pork, natural pork – trendlines are away from technical farming, but we somehow think we can grow demand with GMO pork?

We read that the NPPC supports gene editing. Where is the study that says consumers will buy it? Will Packers buy it? What happens if we lose 10-20 percent demand? What happens if, like Ractopamine (Paylean), countries want pork certified as free from GMO and gene editing? What happens to demand if Pork has to be labelled as GMO or gene edited? Ask your neighbour. What sort of path are we going on?

We are a swine genetics company. We believe in genetic advantages. We use genetic tools, including genomics, to help identify traits that improve production results. We know that gene editing is possible. Our concern is what it could do to consumer demand for pork.

NPPC seems to be pushing this, but ask if there are studies that demonstrate consumers' acceptance for GMO pork. For 20 years the NPPC pushed “the other white meat” slogan, backed by $1 billion in our check-off money. In those 20 years, pork demand has flatlined and we lost a huge portion of market share in total meat consumption. The NPPC’s record on understanding the market is spotty at best. Maybe some further thought should be put into the path we are going, “hopefully not a path to demand hell”.