 On a monthly basis, we provide a more comprehensive review of key swine industry performance and profitability indicators, in addition to our normal weekly profitability updates.International Hog PricesWe update international hog prices monthly and convert them to US dollars per carcass cwt (100 lbs.) for an accurate current comparison. There are some important trends worth mentioning.  The U.S. price has declined seasonally since reaching its peak in June, and is now one of the lowest presented, only surpassing Germany, Denmark, and Belgium at the end of October.China’s sharp price decline for most of this year reversed slightly in July and was declining again until October, where we saw a dramatic 30% increase. Though difficult to discern, their earlier price decrease was likely a combination of increased African Swine Fever cases and economic liquidation, both prompting additional marketing volumes, in addition to real expansion in China have prompted this price moderation. Reports of economic liquidation among heavy (> $100/head) losses have recently resulted in an increase in China hog futures and their pricing turned around in October. While Russia’s price surpassed China’s briefly in October, their price has declined in recent weeks and now sits approximately 30% lower than China’s. Prices for EU countries, Mexico, and Canada all experienced seasonal decline in October; however, not as sharp of decline as the U.S. price. China was the only country that saw a price increase from last month. Belgium, Denmark, and Germany producers have the lowest prices today, no doubt a result of ASF restricting exports from that region.U.S. Pricing Mechanisms Monthly, we also update data for three common pricing methodologies for independent producers of hogs, which had illustrated the disadvantage of being paid on a Western Corn Belt and, to a lesser extent, CME Lean Hog Index basis as compared to a cutout basis over recent years. This trend flipped in spring/summer 2021 with the reduction in slaughter numbers and strong demand. However, this relationship has returned to historical relationships, with a whopping $30 to $40 per head disadvantage of WCB pricing, as slaughter numbers versus plant capacity have gotten tighter…this trend will likely continue over the coming months.   NutriQuest Business Solutions is a team of leading business and financial experts that bring years of unparalleled experience in the livestock, row-crop, and financial industries. At NutriQuest our success comes from helping producers realize improved profitability and sustainability through innovation driven by a relentless focus on helping producers succeed. |
| NutriQuest | 3782 9th Street SW, Mason City, IA 50401 |
