Optimism Seen in Hog Markets
Dr. Steve Meyer, Vice President , Analyss EMI Analytics
Don Wicks: 00:05 From the Pork Checkoff in Des Moines Iowa, it’s Pork Pod. Pork Pod, a look at the hot topics in today’s pork industry. The Pork Checkoff is working for you through various forms of research, promotion, and consumer information projects. This is Don Wick speaking on behalf of the Pork Checkoff, and today our guest is Steve Meyer, Vice President of Analysis with EMI Analytics. Steve, we’ve seen a nice bump in this hog trade, both in the cash and in the futures, as of late. Give me your idea of what dynamics really are at play here.
Steve Meyer: 00:38 The big dynamics play is two new packing plants, and they keep on rolling rolling up their dailies. They added, both of them added about a thousand a day this week. So they’re both over 20 and still pushing. The plant in Sioux City says they’ll be full by the end of November on the first shift. The plant in Coldwater Michigan says it will be after the first of the year before they are full on their first shift. But still you know that’s 40,000 hogs a week in plants that we didn’t have seven weeks ago. And so while they had a lot of their own supply, you know, those hogs, it wasn’t as if they just appeared when they opened the plants. They’ve been going somewhere and so you’ve had several packers chasing loads the last couple of weeks and we’ve seen the cash market respond to that. Futures are, you know, unabashedly optimistic, with December trading near 65 and I can’t get them that high. But I still think there’s a lot of solidity in this market right now, and you know, bellies have kind of found a footing here in the 90s.
Steve Meyer: 01:40 Hams have hung in very well and normally hams rally in the mid to late October and then will back off. But a stronger peso could sure help them this Fall too. So we think there’s a lot of sideways movement the rest of the year, which is a victory in the fourth quarter.
Don Wicks: 01:57 It’s amazing is when you look at the numbers we’re dealing with!
Steve Meyer: 02:04 Yes, yesterday 465,000, the highest ever! And we’re going to continue to do that because these plants continue to run up. I mean we’re going to set, you know ,we’re going to get up to 470 or so I think here, before the end of the year . And yeah we’re pushing a lot of hogs through but the product apparently is moving. We’ll have a cold storage report next week that will be kind of important. It’ll reflect September, but exports were up 9 percent on the weekly data.
Steve Meyer: 02:27 We’re up 9 percent from a year ago during the month of September, which tells me that exports are sure hanging in there and thank goodness they are. Because you know we’ve got to keep exports strong. And therein lies the biggest risk I think we face, the most the highest probability risk we face, is these trade issues that we’re going through with the administration right now. I don’t think they’re going to shoot us in the foot this fall. But you know they’re kind of taking aim for later if we don’t get something done on them.
Don Wicks: 02:59 Steve Meyer from EMI Analytics. Thanks to you for listening to this edition of Pork Pod. For more information on this topic, or the Pork Checkoff itself, visit pork.org.