Lean Hog Futures June, July, August and October reached new contract highs last Friday.
Long ways from the prediction of the Chicken Little economists who expounded last August with 2021 summer futures in $75 range that there was little chance of higher prices in 2021. Its over $80 per head difference.
Current Iowa/Minnesota slaughter weights are below the 5-year average weights. At first of this year they were 7 lbs. heavier than the 5-year average (286 – 293); now 2 lbs. below; a year ago, right now they were 11 lbs over 5-year average. Tells us hog supply is very current. The 5-year average Iowa/Minnesota slaughter weight shows a low of 277 lbs. in the first part of August. We expect to see similar weights this year but probably before August.
U.S. Pork Cut-outs closed Friday at $126.59 higher yet again. Choice Beef Cut-outs were $3.3097. The huge range between Pork and Beef in our opinion is a great support for high pork price sustainability. It also continues us to question why Beef is so much more than Pork. Pork Cut-outs tell us something very obvious.
All Pork cuts leading in pricing have marbling (taste). The push to too lean pigs has devalued Loins and Hams. Consumers vote with their money (Loins and Hams are about 50% of carcass). The joke is some think a pretend Duroc is the answer. Using Durocs with little marbling ends up the same crap just with a different name. Exports
Despite the high Pork Cut-outs relative to history, exports stay strong. Pork sales to Mexico were 20,780 metric tonnes a week ago. Our farmer arithmetic tells us that’s equivalent to over 200,000 market hogs. Mexico hog market is on fire at 47 pesos/kg or $1.07 U.S. /lb. liveweight. We expect continued massive U.S. Pork sales to Mexico to fill the hole of liquidation and disease. For Mexican producers they were benefiting from the high prices and we expect that to continue.
World Mega Producer
The last three years, Genesus and National Hog Farmer worked together to produce the Global Mega Producer list. It was the idea and concept of Steve May at National Hog Farmer. At the first of this year the National Hog Farmer stopped after several decades publishing their monthly magazine.
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New Barn Survey
“10,000 sow barn getting built in South Dakota this year. This one definitely breaking ground this year or already has hole dug replacing some old batch farrow farms but for the most part this will be new sows on feed.” “Heard of new sows in South Dakota two 6,000 and one 9,000 sows – this was chatter from a construction crew in Iowa.” “You did not hear from me, Jim, but heard from a construction firm that a certain vet clinic was planning a something like 4 or 5 10k sow units…” “6,000 in Illinois burnt down… being worked on right now. “10,000 sow barn being built in South Dakota this year 3,000 sow barn being built in SW Minnesota + next year in 2022 and 5,000 – 10,000 barn being built in South Dakota next year 2022??? Not official” This is what we got. Seems the only sow barn that is actually being built at this time with any confidence is the 6,000-sow barn that burnt down. The others are varying degree of planning it appears. If you talk to builders or equipment people, lots of sow barns get quoted but for whatever reason they don’t get built. High feed prices are measured building costs have moved break evens up.
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Yevgen Shatokhin, Genesus Official Representative in Ukraine and Kazakhstan:
+380 (50) 444 2633 |
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shatokhinyevgen@gmail.com |
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