10 August 2022

3 minute read

By: Jim Long

North America

• U.S. lean hog prices continue very strong with the National lean hog prices averaging $124.43 lb. last Friday.
• U.S. pork carcass cut-outs also are strong last Friday at $1.25 lb.

As usual, the cuts with the most marbling (flavor) lead the way in value, consumers vote with their money. The legacy of pigs too lean can be seen in the Hams and Loins languishing in value. Half the carcass is in Hams and Loins, never a bad idea to improve their taste and subsequent value, this can only be done by increasing marbling. Cardboard tasting Loins-Hams are a cancer to our industry, stopping our ability to grow demand and consumption.

• Beyond Meat (NASDAQ: BYND) is reported to have burned $1 billion in cash over the last twelve months. Not exactly going forward. Many of the plant-based fake meat products have poor taste or repugnant taste which is why they are failing. Taste matters. Of note U.S. per capita, red meat and poultry consumption are at historical highs. Vegans be damned.
• Interest rates are climbing, putting up costs for all producers higher. It’s also affecting breakeven costs for existing and proposed new operations. Higher interest rates are affecting producers everywhere and will slow production.
• We have been writing since last fall about the massive financial losses the China industry was encountering. We predicted a huge decrease in production. Hog prices have doubled in China since March lower hog numbers come through. Some in China are saying the breeding herd has decreased by 20% (-8 million sows). According to data from the China feed industry pig feed output in June of 9.45 million tons was down 12.4% from last June (over 1 million tonnes less meaning less corn-soybean needed).

We also have been expecting as pork supply drops in China pork imports will increase. A week ago, for that week U.S. sales to China were 16,770 tonnes (farmer arithmetic equivalent to 160,000 hogs). Year to date 116,706 mt. No one buys pork if there isn’t a market or demand. We expect to see increased sales of pork from North America and Europe. Every pound of pork that goes to China isn’t available for domestic use or other export markets. This will sustain and enhance hog prices.

Summary

• U.S. lean hog prices and pork cut-outs are strong reflecting strong demand.
• European prices such as in Spain at record levels.
• China hog price $1.45 U.S. lb. liveweight – large U.S. sale for pork (16,000 mt) – both reflection of cut pork supply and stronger prices.

Our premise has been and continues that lower supplies in USA-Europe-China will lead to strong global hog prices.

At Genesus we believe that we are producing Genetics of pork that the consumer craves. It’s a better eating experience. Genesus – Jersey Red Duroc is the name of our World Leading Duroc. Attached is an interview of Spencer Long of Genesus and Jim Eadie of Swineweb discussing the Jersey Red Duroc.