TheMeatSite.com - TheMeatSite.com - news, features and articles for the meat processing industry

News

Autumn US Hog Price Need Protecting

29 April 2015
Genesus - The first power in genetics

US - Easter is in the rear view mirror, and cash hogs should start to move higher as we head into summertime hog slaughter numbers, write Allan Bentley and Dr Joe Carr of Genesus.

We have recently been slaughtering some large numbers of hogs and that has been holding prices down. What about the fall? We think that any push in the fall futures, as a result of cash price increase needs to be taken advantage of. It will not be much either.

Everyone knows the numbers this fall will be big; fourth quarter hogs have always been the Achilles heel for hog prices. If we can protect those fall prices, regardless of whether you think they should be higher, we should. Maybe not 100 per cent but at least 50 per cent of your production.

The H5N2 avian flu is popping up all over. As a percentage of the entire herd, it does not have huge impact, although the latest number is 1.6 million birds in Minnesota that have been affected. It has been a major news story.

Our exports are being affected. That difference will have to be absorbed by the American public. Pork exports are also substantially lower than the trend. The strength in our dollar is and will continue to affect exports. Markets do not care that so many things are outside of the Pork Industry’s ability to manage.

The one thing that we can manage is expansion. I believe that is being managed by the lenders. Bankers are really starting to want to see P&L reports. Bankers are numbers guys. Being your friend is only relevant if you are profitable. They will turn on you faster than a sow protecting her pigs.

In a mature industry, a producer needs to know their exact cost of production and when to take profits or limit losses. More runs are scored with base hits and walks then with home runs. I believe that any planned expansion that is not under way will not happen. If you see hog barns being built they will finish. However, all this talk about sow barns being planned here and being planned there will not happen. The banks have already put those projects on hold.


To find out more about Genesus Genetics, please take the time to visit their website at www.genesus.com .



Our Sponsors

Partners


Seasonal Picks

Meat Cuts and Muscle Foods - 2nd Edition