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Jim Lengthy Pork Commentary, USDA June 1 Hogs and Pigs Report – Fewer is Higher, July 4th 2022 – Swineweb.com


Jim Lengthy, President and CEO Genesus Genetics

The USDA launched its June 1 Hogs and Pigs Report final week. Our observations:

June 1
  (1,000 head)
  2020 2021 2022
Saved for Breeding 6,236 6,220 6,168
Market 71,038 66,933 66,356
Pigs per Litter Dec.-Might 11.00 10.95 10.97
Sows Farrowing Precise Dec-Might 6,329 5,964 5,904
June-November 6,425 6,098 6,025

 

 

Fairly easy to see. Much less sows, much less market hogs, no enchancment in litter dimension, much less sows farrowing and to farrow. NO improve in manufacturing.

June 1 Market Hogs in stock down 4.7 million head from 2020 or about 200,000 head much less every week to market subsequent 6 months. There can be no problem to slaughter capability anytime quickly.

With 4.7 million much less pigs in stock no surprise there are such a lot of nurseries and finishers empty or underneath capability. That is driving demand for small pigs to satisfy shackle commitments and assist guarantee fertilizer wants from manure. Presently, hog manure is valued at $15-20 per head as fertilizer. What as soon as was thought of a legal responsibility is now evolving into an actual asset.

Our place is that lean hogs for the subsequent 12 months will observe at a minimal to the final 12 months with upside. Our premise. Much less sows in place. There can be no extra U.S. hogs. U.S. Beef provide declining as much as 2 billion lbs. subsequent yr. Pork exports can have a higher pull. Subsequent 12 months each Europe and China can have considerably much less pork manufacturing. Europe can have much less to export. China will import. All elements that at a minimal will preserve U.S. hog costs monitoring to final 12 months. However! We anticipate the higher pull of pork will push costs increased than we have now had within the final 12 months.

 

Germany

Preliminary outcomes from Germany’s Federal Statistics workplace point out the sow liquidation in Germany continues on unabated. As of Might 3, Germany had decreased from November 3, 2021 (6 months) 6.2% in its sow herd. The sow herd had decreased 9.8% since Might 3, a yr in the past. Within the final 18 months, Germany’s sow herd had declined from 1.695 million to 1.480 million, a decline of over 200,000. An enormous quantity and reflection of the financial pressures of manufacturing pigs underneath the price of manufacturing triggered by ASF issues, excessive feed costs, and new animal welfare rules. At this level, we imagine Germany’s liquidation remains to be ongoing as pig costs proceed underneath the price of manufacturing.

Germany was as soon as the biggest producer in Europe. Now that’s Spain. In 2015 Germany had 1.923 million sows. Now 1.480 million and nonetheless declining. Germany was as soon as an enormous exporter has little pork to export sooner or later when you think about their manufacturing in comparison with home consumption.

Feed

Stating the apparent grain is in free fall, corn dropped over 60¢ a bushel final week. Wheat declined within the $1.00 bushel vary.

  • Corn December contract excessive $7.66 bushel – final Friday shut $6.07 = decline $1.59 bushel.
  • Wheat July contract excessive $12.84 bushel – final Friday shut $8.31 = decline $4.53 bushel.
  • Soybeans September contract excessive – final Friday shut $14.16 = decline $1.90 bushel.

Decrease feed prices are wanted to have sustainable hog profitability. Not there but however the trendline is resulting in the “surest remedy to excessive costs is excessive costs.”

China

Now we have been writing since final fall that China was liquidating at an enormous degree attributable to trade losses of over $1 billion every week. We additionally wrote the one fact can be hog value as different information is sort of suspect. Since mid-March China’s common hog value has gone up each week.

  RMB/kg U.S. Greenback lb./liveweight
March 18 11.98 85¢
June 24 17.96 $1.21
July 7 20.52 $1.38

 

An enormous bounce in value final week of 17¢ lb. on a 270 lb. hog is $46 per head. Since mid-March a rise of $143 per head (270 lb. hog). The trade has gone from losses of about $100 per head to earnings of about $50. The hogs going to market now are from September breedings. China’s sow herd has reduced in size each month since then. China’s hog value will proceed to extend. Within the not-too-distant future, China can be moving into world markets by importing pork.

Abstract

U.S. has much less hogs yr over yr. Europe has fewer hogs. China has fewer hogs. We’re in unprecedented territory because the three main hog-producing areas on this planet are reducing manufacturing all on the similar time for the primary time in historical past. Costs have vital upside to the place they’re as we speak in all areas within the coming months.

Woodlands Farm Tour

Just lately Jordan Craig Service and Gross sales Consultant for Genesus in Manitoba did a walk-through Woodlands video farm tour. Woodlands has been a Genesus industrial buyer for 20+ years and makes use of Genesus Jersey Crimson Duroc sire bred to Genesus F1 dam. Woodlands was the primary herd in North America to get 30+ PMSY. The video takes you thru all the Woodlands unit and exhibits pigs from begin to end. The presentation additionally highlights the information and leads to Woodlands has as a Genesus buyer.

Genesus – Woodlands Farm Tour hyperlink:

https://www.youtube.com/watch?v=gBNTn6M-Mmk

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