Search Site   
Current News Stories
Solar eclipse, new moon coming April 8
Mystery illness affecting dairy cattle in Texas Panhandle
Teach others to live sustainably
Gun safety begins early
Hard-cooked eggs recipes great for Easter, anytime
Michigan carrot producers to vote on program continuation
Suggestions to celebrate 50th wedding anniversary
USDA finalizes new ‘Product of the USA’ labeling rule 
U.S. weather outlooks currently favoring early planting season
Weaver Popcorn Hybrids expanding and moving to new facility
Role of women in agriculture changing Hoosier dairy farmer says
   
News Articles
Search News  
   
Analysts: China hog numbers suspicious after ASF outbreak
 

By DOUG SCHMITZ

DES MOINES, Iowa — Last month’s hog numbers came as no surprise to agricultural economists analyzing the March 28 USDA Quarterly Hogs & Pigs report.

“I didn’t find any evidence that pace of expansion is changing,” said Kevin Bost, president of Procurement Strategies in Elgin, Ill., in a teleconference with reporters. “I think it’s important to point out that we have a bigger pork supply coming. I noticed a decline in pigs per litter from fall to winter, but at a smaller decline than the last three years.”

Helping Bost analyze the report were Kevin Grier, president of Kevin Grier Consulting and Analysis in Guelph, Ontario, and John Nalivka, president of Sterling Marketing in Vale, Ore.

The report stated 74.3 million hogs and pigs were on U.S. farms, up 2 percent from March 2018, although down slightly from last December. Of the 74.3 million, 67.9 million were market hogs, while 6.35 million were kept for breeding.

“I think we see with the losses that occurred on the production side of this business going into the second half of last year and the first quarter of this year, there has been some slowing down of the expansion phase,” Nalivka said.

“You can hold your breeding herd steady and your sows steady. But at the same time you continue to see that production efficiency and increased pace on that farrowing rate, so we continue to have these larger pig crops so it fills that gap going into this increased packer capacity.”

Between December 2018-February 2019, 33 million pigs were weaned on U.S. farms, up 3 percent from the same time period one year earlier, while U.S. hog and pig producers weaned an average of 10.7 pigs per litter. In addition, producers intend to have 3.12 million sows farrow between March-May, and 3.19 million sows farrow between June-August.

Looking at state numbers, the nation’s top hog producer Iowa had the largest inventory at 23.5 million, up 4 percent from the previous year. North Carolina and Minnesota had the second- and third-largest inventories, with 8.9 million and 8.7 million, respectively.

Illinois’ inventory of all hogs and pigs as of March 1 was 5.2 million, down 2 percent from Dec. 1, 2018, and down 2 percent from last March. Indiana’s total hog and pig inventory was estimated at 4.15 million, down 100,000 from a year ago.

In Michigan, the state’s total inventory was estimated at 1.21 million, up 10,000 from a year ago. Ohio’s total inventory was estimated at 2.6 million, down 50,000 from a year ago.

Chinese numbers unreliable

Moreover, all three analysts agreed China’s numbers in the wake of the country’s recent African swine fever (ASF) outbreak were sketchy and unreliable. Nalivka said China’s numbers were suspect, and its losses went largely underreported.

Grier said the sow herd loss the Chinese government has admitted to is roughly equal to all of U.S. production. “What’s coming in terms of losses? No one really knows,” he said. “It could be one-and-a-half to two times total U.S. production being lost in China alone. Those numbers have helped me get a feel for what is going on there.”

As a result, he said the United States and other countries couldn’t possibly fill that demand. “There will be scarcity in China, Southeast Asia, and even here in North America, for some buyers.”

However, Nalivka said China’s impact on U.S. meat exports can still be felt. “In terms of China’s demand versus their supply, they are also picking up their purchases of beef significantly from Brazil and Australia. We’re seeing that impact here in this market on the beef side.”

But Nalivka noted China only represented 6 percent of the U.S.’s total exports in 2018, as compared to Mexico at 30 percent, Japan at 21 percent, and South Korea at 12 percent.

On April 4, Allendale reported China’s agriculture ministry said it will require pork processors handling raw pork to test for the presence of the ASF virus from May 1. The tougher procedures come as the virus continues to spread through the world’s largest pig herd, which has often been found in food products.

Allendale added June hogs were up another $3.32 on April 3. “The close near the day’s highs is a strong signal on the charts. The upside gaps mentioned yesterday on the October and December contracts were also filled. This all comes as ASF takes its toll,” it stated.

What’s more, the World Organization for Animal Health reported ASF has spread to Cambodia. It was not immediately clear how severe the outbreak is.

On April 5, President Trump said the U.S. and China were getting close to a trade deal that could be announced within four weeks. He issued a warning to Beijing, stating absent a pact, it would be difficult to allow trade to continue, Allendale, Inc. reported.

“We’re getting very close to making a deal,” Trump said. “That doesn’t mean a deal is made, because it’s not. But we’re certainly getting a lot closer. And I would think within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

If a deal is made, Trump said he would hold a summit with Chinese President Xi Jinping.

That same day, Allendale noted lean hog futures finished the session limit-up in most contract months due to the hope of a China deal, additional cases of ASF, and storm developments in the middle of the following week. On April 5, lean hog futures were at expanded limits to $4.50.

Grier said he was looking for about a 2 percent increase in slaughter in the second and third quarters, and based on farrowing intentions and the normal increase in pigs per litter, predicting a 1 percent increase in slaughter in the fourth quarter and into the first quarter of 2020.

“Again, these are increases on top of huge, huge numbers, and that’s really what the reality of it is – a lot of pork,” he said.

 

4/10/2019