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US Pork Industry Economic Situation and Outlook - Dr. Steve Meyer, Paragon Economics, from the 2014 Boehringer Ingelheim North Carolina Swine Health Seminar, August 15, 2014, Wrightsville Beach, North Carolina, USA. More presentations at http://www.swinecast.com/2014-boehringer-ingelheim-carolina-swine-health-seminar
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From information, knowledge
Paragon Economics, Inc.
Steve R. Meyer, Ph.D.Paragon Economics, Inc.
BI NC Health Seminar -- August 2014
U.S. Pork Industry Economic Situation & Outlook
From information, knowledge
Paragon Economics, Inc.
U.S Livestock -- Readers’ Digest version . . . U.S. crop conditions are among the
best EVER – maybe 180 bu. corn, 50 bu. beans
CORN: LOWEST SINCE ’10, BEANS: SINCE ’12
- CASH GRAIN: The gravy/ethanol train is GONE!
LH futures: Aug >$115, Above $86 thru Aug ’16 – and all have been MUCH higher
STILL ALL-TIME RECORD-HIGH U.S. REVENUE!!! $US is HALF of its ‘84 high and only
+13% from its March ‘08 lowTRADE REMAINS A POSITIVE!
04/11/2023 2
From information, knowledge
Paragon Economics, Inc.
Conclusion Number 1 . . .
EVEN THIS GUY WOULD HAVE A HARD TIME SCREWING THIS UP!!!
04/11/2023 3
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Paragon Economics, Inc.
Conclusion Number 2 . . .
BUT THIS GUY – MAYBE???
04/11/2023 4
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THIS MARKET HAS A LOT OF MOVING PARTS!
04/11/2023 5
. . . economists/analysts feel like this guy!
From information, knowledge
Paragon Economics, Inc.
Key Issues for 2014 and beyond Grain Prices and Costs – Are The Bad
Times Really Over For Good? Demand – Can We Make This Last? Beef and Chicken Supplies – Biofuels,
Drought and Production Challenges Hog Supplies – PEDv’s Long Tail?
04/11/2023 6
From information, knowledge
Paragon Economics, Inc.
In early June – ’14 costs were near $82 . . .
04/11/2023 7
. . . And ‘15 costs were above $77
From information, knowledge
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Friday -- <$80 for ‘14, <$70 for ‘15!!!!
04/11/2023 8
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The corn supply situation is vastly different
Record high world output & consumption
Projected Y/E stocks the highest in 15 yrs.
MAJOR increase in non-U.S. production
04/11/2023 9
From information, knowledge
Paragon Economics, Inc.
USDA June 30 report highlights . . .
04/11/2023 10
From information, knowledge
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USDA Aug Corn S&D – yield of 167.4 . . .
04/11/2023 11
USDA July
USDA August
% Chng vs '13-14
Acres Planted Mil A 97.2 95.4 91.6 91.6 -4.0%Acres Harvested Mil A 87.4 87.7 83.8 83.8 -4.4%Yield Bu/A 123.4 158.8 165.3 167.4 5.4%Beginning Stocks Mil Bu. 989 821 1246 1181 43.8%Production Mil Bu. 10780 13925 13860 14032 0.8%Imports Mil Bu. 160 35 30 30 -14.3%Total Supply Mil Bu. 11929 14781 15136 15243 3.1%Feed & Residual Mil Bu. 4325 5175 5200 5250 1.4%Ethanol for fuel Mil Bu. 4648 5120 5050 5075 -0.9%Non-Ethanol FSI Mil Bu. 1405 1385 1385 1385 0.0%Exports Mil Bu. 730 1920 1700 1725 -10.2%Total Usage Mil Bu. 11108 13600 13335 13435 -1.2%Carryover Mil Bu. 821 1181 1801 1808 53.1%Stocks/Use Pct. 7.4% 8.7% 13.5% 13.5% 55.0%Nat. Wtd. Avg. Farm Price $/Bu. 6.89 4.40 - 4.50 3.65 - 4.35 3.55 - 4.25 -12.4%Source: USDA World Supply and Demand Estimates
U.S. CORN SUPPLY AND UTILIZATION - AUGUST
Units 2012/13 2013/142014/15
. . . Lower than expected – but will get larger
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USDA’s yield model – note coefficient sizes
04/11/2023 12
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’94 & ‘04 deviations imply 179-181 bu/acre!
04/11/2023 13
. . . “Big crops get bigger” likely applies
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USDA yield estimates – Big crop gets bigger!
Year July* Aug Sept Oct Final 1994 125.
4128.4
129.0
133.8
138.6
2004 145.0
148.9
149.4
158.4
160.4
2014 165.3
167.4
180??
04/11/2023 14
From information, knowledge
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Key development is FLAT ethanol usage . . .
04/11/2023 15
. . . E10 “blend wall”, flat RFS make exports key
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World prod, cons and stocks are record high
The reason is still China – now takes over 60% of world soybean trade
And still growing!
04/11/2023 16
. . . & S/U is 2nd highest ever – but $11 beans
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Bean acres are up by 5 million . . .
04/11/2023 17
. . . But half of growth is in ND, MN, SD and NE
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USDA’s July WASDE soybean S&D . . .
04/11/2023 18
USDA July
USDA August
% Chng vs '13-14
Acres Planted Mil A 77.2 76.5 84.8 81.5 6.5%Acres Harvested Mil A 76.2 75.9 84.1 80.5 6.1%Yield Bu/A 39.8 43.3 45.2 45.2 4.4%Beginning Stocks Mil Bu. 169 141.0 140 140 -0.7%Production Mil Bu. 3034 3289.0 3800 3816 16.0%Imports Mil Bu. 41 80.0 15 15 -81.3%Total Supply Mil Bu. 3243 3509.0 3955 3971 13.2%Crushings Mil Bu. 1689 1725.0 1755 1755 1.7%Exports Mil Bu. 1317 1640.0 1675 1675 2.1%Seed Mil Bu. 89 99.0 92 92 -7.1%Residual Mil Bu. 8 -94.0 19 19 -120.2%Total Usage Mil Bu. 3103 3369.0 3541 3541 5.1%Carryover Mil Bu. 141 140.0 415 430 207.1%Stocks/Use Pct. 4.5% 4.2% 11.7% 12.1% 192%Nat. Wtd. Avg. Farm Price $/Bu. 14.40 13.00 9.50 - 11.50 9.35 - 11.35 -20.4%Soybean Oil Price Cents/lb. 47.13 38.50 36.00 - 40.00 35.00 - 39.00 -3.9%Soybean Meal Price $/ton 468.11 470.00 355 - 395 340-380 -23.4%Source: USDA World Supply and Demand Estimates
U.S. SOYBEAN SUPPLY & UTILIZATION - AUGUST
Units 2012/13 2013/142014/15
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Consider yield deviations in ‘94 and ‘04 . . .
04/11/2023 19
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A problem for meal users: Cheap SBO
04/11/2023 20
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SB oil is equivalent to HO – think “burn rate”
04/11/2023 21
. . . & it can’t fall much, if any – good for SBM
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Summary of grains . . . Do I think corn will be $3 and beans
will be $8?- NO – but $3.50 and $9 are definitely in
play- $9 beans would push meal to near
$300/ton Key issues
- Temperatures have been, if anything, low
- Still need August rain to fill corn and make a bean crop – very doable given soil moisture
- Both crops are somewhat susceptible to an early frost – especially beans
04/11/2023 22
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Implied cash prices – Omaha, Decatur
Both corn and SBM are back in the ’07-’10 range
04/11/2023 23
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Key Issues for 2014 and beyond Grain Prices and Costs – Are The Bad
Times Really Over For Good? Demand – Can We Make This Last?
04/11/2023
24
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Today’s Econ 101 lesson . . . No, you can’t leave now!!! The change of a good’s price does not
change its demand It does change the quantity demanded
– but that’s good!
04/11/2023
25
Price
Quantity/Time
P2
P1
Q1Q2
D
S1
S2
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Factors NOT in the chart will move demand . . . Incomes – Positive Prices of
substitutes – Positive
Prices of comple-ments – Negative but insignificant for meats
Consumer tastes and preferences – Positive or negative04/11/20
2326
Price
Quantity/Time
D1 D2D3
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Consider the determinants of demand. . . Incomes
- More money = more quantity purchased at a given price or higher price for a given quantity for “normal” goods
04/11/2023
27
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Data Source: U.S. Bureau of Economic Analysis
U.S. economy is still slow – but growing yr/yr!. . . Q1 revised to +1.9%, Q2 came in
at +2.4%
04/11/2023
28
From information, knowledge
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July job gains slowed to +209k but . . .
04/11/2023
29
. . . Feb-July is best 6 months since APRIL 2006!
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Data Source: Bureau of Labor Statistics
Unemployment ticked up to 6.2% in lyne . . . . . . U-6 is down to 12.1% but was
10% in 2008
04/11/2023
30
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2013 RPDI growth averaged 0.1% . . .. . . 2014 has been improving -- +1.7%
avg. YTD
04/11/2023 31
From information, knowledge
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Consider the determinants of demand. . . Incomes
- More money = more quantity purchased at a given price or higher price for a given quantity for “normal” goods
- Current Situation: Not hindering demand but not providing robust help, either.
04/11/2023 32
From information, knowledge
Paragon Economics, Inc.
Consider the determinants of demand. . . Incomes
- More money = more quantity purchased at a given price or higher price for a given quantity for “normal” goods
- Current Situation: NOT HELPING DEMAND
Prices of substitutes and complements- Meat prices rose more than CPI in 2013- Beef lost, chicken gained, pork was a
wash04/11/2023 33
From information, knowledge
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Key Issues for 2014 and beyond Grain Prices and Costs – Are The Bad
Times Really Over For Good? Demand – Can We Make This Last? Beef and Chicken Supplies – Biofuels,
Drought and Production Challenges
04/11/2023 34
From information, knowledge
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Broiler flock +4-5% from July-Nov but up . . .
04/11/2023 35
. . . Small growth Apr-June, July +2.2%
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Old flock = fewer, lower-quality eggs have left . .
04/11/2023 36
. . . Sets and placements near yr-ago, YTD
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Chicken output virtually even with ’13 . . .
04/11/2023 37
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Surprise, surprise – chicken prices steady!
04/11/2023 38
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Cattle numbers: Long-term downtrend
04/11/2023 39
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Beef: Unprecedented cow/calf profits!!!!
04/11/2023 40
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MUCH better pasture conditions . . .
04/11/2023 41
. . . Especially in S. Plains
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. . . Feeder supply is down 3% vs. ‘12– record low
04/11/2023 42
Livestock Marketing Information CenterData Source: USDA-NASS
Placements are coming from a TIGHT supply
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What do FC supplies mean? – Consider . . .
04/11/2023 43
. . . Feedlot costs of GAIN have fallen 32%
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But total fed cattle cost is skyrocketing. . .
04/11/2023 44
. . . Due to the feeder market at $200+
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May & June plcmts were -7%, March & April were -5%
04/11/2023 45
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Beef prod is down 5.7% YTD & cow is –12.4%
04/11/2023 46
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Beef consumption/supply will be -5.3% yr/yr . . .
04/11/2023 47
. . . And down another 3% in 2015!
Livestock Marketing Information CenterData Source: USDA-NASS
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Paragon Economics, Inc.
RECORD-HIGH cutout values – again this week!
Weekly averages at and above $260!!! We expected $215-$225 for cutouts thru
June – usually the seasonal low point! Pork prices helped – but we think beef is
now helping pork again04/11/2023 48
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Conclusions about incomes and other goods Incomes – Slightly positive and
gaining- Improving but the gains are SLOW- Still a lot of uncertainty, mistrust
Substitute prices -- Positive- Record-high beef, higher-than-expected
chicken are both helping pork- Important but cross-elasticities are
small The only demand-shifting factor
left is consumer tastes and preferences
04/11/2023 49
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And things are MUCH better for animal fats . . .
04/11/2023 50
. . . protein is in, carbs are out – BIG CHANGE!
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So what we are seeing now is . . . Some reduction in Supply that would
cause a nominal price increase And a BIG boost from Demand!
04/11/2023 51
Price
Quantity/Time
P2
P1
Q1Q2
D1
S1
S2
D2
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Per cap cons.: -10% vs. ‘04, flat thru ’15 . . .
04/11/2023 52
. . . But this is mainly due to PRODUCTION!
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The evidence of strong demand is PRICES . . . . . Beef, pork records but increases
are slowing
04/11/2023 53
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Demand indexes were ALL higher for 2013!
04/11/2023 54
. . . First time that has ever happened
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Meat/Poultry RPCE was higher all of 2013
04/11/2023 55
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January meat/poultry RPCE was soft . . .
04/11/2023 56
. . . But it began picking up in February
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Pork and beef (red meats) are the big factors. . .
04/11/2023 57
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U.S. pork exports exploded in March and . . . . . . But have softened markedly
since- PRICES
04/11/2023 58
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Mexico may overtake Japan as #1 U.S customer . . . Mexico, Korea and Russia have
grown in ‘14
04/11/2023 59
From information, knowledge
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Key Issues for 2014 and beyond Grain Prices and Costs – Are The Bad
Times Really Over For Good? Demand – Can We Make This Last? Beef and Chicken Supplies – Biofuels,
Drought and Production Challenges Hog Supplies – PEDv’s Long Tail?
04/11/2023 60
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March H&P: Bearish vs. expectations!
04/11/2023 61
Inventories on March 1*
All hogs and pigs 65072 62899 96.7 94.6 2.1Kept for breeding 5836 5851 100.3 99.4 0.9Kept for marketing 59236 57048 96.3 94.1 2.2
Under 50 lbs. 18852 18101 96.0 93.5 2.550-119 lbs. 16251 15717 96.7 94.2 2.5
120-179 lbs. 13169 12793 97.1 94.1 3.0180 lbs. and over 10965 10436 95.2 95.2 0.0
Farrowings**Dec-Feb sows farrowed 2,788 2,867 102.8 100.0 2.8
Mar-May Intentions 2,816 2,884 102.4 100.5 1.9 June-Aug Intentions 2,902 2,960 102.0 100.9 1.1Dec-Feb Pig Crop* 28,099 27,316 97.2 96.4 0.8Dec-Feb pigs saved per litter 10.08 9.53 94.5 96.4 -1.9
*Thousand head ** Thousand Litters Source: Urner Barry
Category 2013 2014'14 as Pct of
'13
Pre-Report
Est's
Actual - Est
USDA QUARTERLY HOGS & PIGS REPORTMarch 28, 2014
. . . But definitely picked up some impact
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Monthly data – BIG drop in litter size but . . .
04/11/2023 62
. . . a slight (curious) improvement for Feb
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The devil was in the details, though . . . March H&P would put quarterly 2014 slghtr
totals down 2.1 (3.6), 3.4 (4.4), 4 and 2.9% yr/yr.
- IMPLICATION: Higher weights would leave ‘14 production very near 2013 levels
March slaughter was down 6.7% while 180+ inventory was down 4.8%
- AND SEP-NOV PIG CROP WAS UNCHANGED
Dec-Feb pig crops in MN, IA and IL were + 5, +2 and +3% yr/yr IN SPITE OF WIDESPREAD PEDV LOSSES
04/11/2023 63
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Latest PEDv info – thru 7/12 shows some gains
U.S.: New low of 79 weeks of 7/5 & 7/19 IA had the largest number of accessions IA, MN & IL are only ones in double
digits04/11/2023 64
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But HOW MANY pigs were being lost? Early on – observers kept a tally of
sows- Oklahoma – pretty easy- North Carolina – not too hard since you
actually TALKED to each other!- Iowa and Midwest - -No hope of
keeping up Developed some “rules of thumb” on
numbers lost per sow infected- 2.5 to 3.5, depending on the time
horizon- Some farms with lingering issues had
higher losses
04/11/2023 65
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If we have a total, then need timing. . .
04/11/2023 66
. . . I used suckling pig accessions
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May-June data still imply HUGE fall cuts . . . Assumes 58% of sows infected since
5/13 2.7 pigs lost per sow -- conservative Total loss is now over 8 million pigs
04/11/2023 67
PIG LOSS COMPUTATIONS PCT OF PRIOR YR. SLGHTR ADJUSTMENTSBirth Month
Monthly Share
Small Farm Adjustment
Pigs lost, thousands
Slaughter Month
Slghtr Yr Ago +2.5%
Percent Change
Cull reduction Sows
Non PED productivity
YR/YR SLGHT
May 0.00% 0.00Jun 0.85% 56.31 Dec 9705.8 -0.58% 1.00% -1.00% 2.00% 1.42%Jul 0.79% 65.08 Jan 10205.3 -0.64% 1.00% -1.00% 1.90% 1.26%Aug 3.47% 241.13 Feb 8806.0 -2.74% 1.00% -1.00% 1.80% -0.94%Sep 2.38% 208.96 Mar 9549.1 -2.19% 1.00% -1.00% 1.80% -0.39%Oct 5.42% 393.60 Apr 9592.3 -4.10% 1.00% -1.00% 1.70% -2.40%Nov 5.42% 439.31 May 9440.7 -4.65% 1.00% -1.00% 1.50% -3.15%Dec 7.19% 555.94 Jun 8401.1 -6.62% 1.00% -1.00% 1.30% -5.32%Jan 11.40% 90% 859.96 Jul 9304.3 -9.24% 1.00% -1.00% 1.25% -7.99%Feb 15.11% 90% 1168.37 Aug 9794.2 -11.93% 1.00% -1.00% 1.20% -10.73%Mar 15.90% 90% 1276.42 Sep 9249.5 -13.80% 1.00% -1.00% 1.15% -12.65%Apr 13.95% 90% 1159.60 Oct 10680.5 -10.86% 1.00% -1.00% 1.10% -9.76%May 12.13% 90% 1009.69 Nov 9882.4 -10.22% 1.00% -1.00% 1.05% -9.17%Jun 5.97% 90% 576.05 Dec 9973.4 -5.78% 1.00% -1.00% 1.00% -4.78%
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Rabobank made me look like an OPTIMIST!
04/11/2023 68
. . . As they had Aug at -15%, Sept at -20%
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Actual slaughter declines have been larger
04/11/2023 69
. . . Partially due to delayed mktg/higher wts
YR/YR SLGHT
Slaughter Month
Total Slaughter
Pct. Chng., yr/yr
Barrow/Gilt Slaughter
Pct. Chng., yr/yr
1.42% Dec 9730.1 -2.14% 9397 -2.01%1.26% Jan 9791.2 -1.66% 9459 -1.39%
-0.94% Feb 8668.2 0.90% 8366 1.10%-0.39% Mar 8674.6 -6.89% 8356 -6.92%-2.40% Apr 8855 -5.38% 8527 -5.32%-3.15% May 8619.7 -1.96% 8311 -1.72%-5.32% Jun 8099.5 -5.89% 7795 -5.85%-7.99% Jul 8392 -6.80%
-10.73% Aug-12.65% Sep-9.76% Oct-9.17% Nov-4.78% Dec
CHECK AGAINST ACTUAL SLAUGHTER
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A bullish June Hogs and Pigs report . . .
04/11/2023 70
Inventories on June 1*
All hogs and pigs 65188 62128 95.3 97.0 -1.7Kept for breeding 5884 5855 99.5 101.6 -2.1Kept for marketing 59304 56273 94.9 96.6 -1.7
Under 50 lbs. 19135 17999 94.1 98.1 -4.050-119 lbs. 17078 16071 94.1 96.3 -2.2
120-179 lbs. 12414 11931 96.1 95.3 0.8180 lbs. and over 10678 10271 96.2 96.4 -0.2
Farrowings** Mar-May sows farrowed 2,806 2,797 99.7 102.5 -2.8
June-Aug Intentions 2,890 2,893 100.1 102.1 -2.0 Sep-Nov Intentions 2,780 2,880 103.6 102.6 1.0Mar-May Pig Crop* 28,921 27,361 94.6 97.7 -3.1Mar-May pigs saved per litter 10.31 9.78 94.9 95.2 -0.3*Thousand head ** Thousand Litters Source: Urner Barry
USDA QUARTERLY HOGS & PIGS REPORTJune 27, 2014
Category 2013 2014'14 as Pct of
'13
Pre-Report
Est's
Actual minus
Est.
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Where are we now? Since June 1 . . .
04/11/2023 71
. . . FI hog slaughter -6.2%, barr’s/gilts -5.9%
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Given current and future profitability . . .
04/11/2023 72
. . . Why have we seen no growth as of June?
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Reasons for slow growth . . . USDA has likely missed some growth
– IA down 30k? MN down 10k? TX unchanged?
Hedges – Those who hedged haven’t seen the extreme profits of the cash market
04/11/2023 73
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Neg’d prices: +$30 in March, +$20 in June . . .
04/11/2023 74
. . . Hedged prices still record high vs. history
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Reasons for slow growth . . .
“Alligators” – PEDv has been all-consuming
Gilt availability – multiplier and GP herds
Time – It’s pretty quick to have expanded
04/11/2023 75
USDA has likely missed some growth – IA down 30k? MN down 10k? TX unchanged?
Hedges – Those who hedged haven’t seen the extreme profits of the cash market
Capital – Millions sent to CME to cover margins – not available for expansion now
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U.S. sow slaughter is down 6.0% YTD . . .
04/11/2023 76
. . . Gilt share has been very normal since June
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Bigger hogs is a long-term trend but . . .
04/11/2023 77
. . . Recent growth: Costs, profits, hog numbers
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Question: Will weights fall much more?
USDA estimated weights: Steady for 6 wks.
Packer operations exerting big influence
MPR weights fell 0.1 lb. last week Normal seasonal bottom is in mid-Aug04/11/2023 78
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Cutout set a new YTD high in mid-July . . .
We had summer highs at $120-$125 – and the market beat those
Last three weeks – another adjustment to “normal”??? Look at 5-yr average pattern!
04/11/2023 79
. . . so did hogs but sharply lower since
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Cuts – now on seasonal the down side of all!
04/11/2023 80
. . . Loins, bellies steady; hams $106, trim $116
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Slaughter forecasts – per June Hogs & Pigs . . .
04/11/2023 81
Mil. Hd % Chnge Mil. Hd % Chnge Mil. Hd % Chnge Mil. Hd % Chnge Mil. Hd % Chnge
2013 Q1 27.870 -0.8%
Q2 26.778 0.4%
Q3 27.668 -1.1%
Q4 29.808 0.8%
Year 112.124 -1.0%
2014 Q1 27.580 -1.0% 27.428 -1.6% 27.214 -2.4% 27.320 -2.0% 27.134 -2.6%
Q2 25.420 -5.1% 25.787 -3.7% 25.572 -4.5% 25.020 -6.6% 25.649 -4.2%
Q3 26.459 -4.4% 26.340 -4.8% 26.173 -5.4% 25.520 -7.8%
Q4 28.348 -4.9% 28.198 -5.4% 28.372 -4.8% 28.000 -6.1%
Year 107.525 -4.1% 107.753 -3.9% 107.253 -4.3% 105.860 -5.6%
2015 Q1 27.000 -0.5% 26.184 -3.5% 27.642 1.9% 26.600 -2.0%
Q2 26.241 2.3% 25.316 -1.3% 26.637 3.9% 25.550 -0.4%
Q3 27.362 3.4% 27.496 5.1%
Q4 29.957 5.7% 29.975 5.6%
Year 110.557 2.8% 111.750 4.2%Red figures are analysts' last FORECAST for the given quarter (Q1 done in Dec, Q2 done in Mar, etc.) 7/1/14
Blue figures are estimated using USDA data
Mizzou ISU LMIC Paragon ACTUALJune 2014 Hogs & Pigs -- Commercial Slaughter Forecasts
. . . I fudged a bit: PRRS? Relapses? USDA regard
FI slaughter Q2 to-date: -7.4%, yr/yr
From information, knowledge
Paragon Economics, Inc.
BIG yr/yr slaughter reductions since 7/1. . .
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. . Aug will be closer due to pulled-ahead mktgs
From information, knowledge
Paragon Economics, Inc.
Price forecasts per June Hogs & Pigs . . .
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Mizzou ISU LMIC Paragon CME
Producer-Sold Net Price, All
Methods
Ia-Mn Producer-Sold
Neg'd Base
National Wtd Avg. Base Price
National Net Neg'd Price,
Wtd. Avg.
CME Lean Hog Futures
2013 Q1 83.53 80.63 81.08 82.73 83.34**Q2 91.80 89.30 89.32 90.83 90.66**Q3 97.90 95.58 95.25 98.00 98.98**Q4 84.99 81.28 82.98 85.26 83.93**Year 89.56 86.70 87.16 89.21 89.23**
2014 Q1 93.10 93.10 91.44 92.44 94.91**Q2 113.46 115.38 111.70 116.74 117.48**Q3 125 - 130 120 - 128 117 - 121 124 - 130 114.27Q4 99 - 109 98 - 104 94 - 99 100 - 106 92.45Year 107 - 111 106 - 110 104 - 106 108 - 111 104.78
2015 Q1 90 - 100 87 - 97 92 - 98 92 - 98 86.83Q2 91 - 101 90 - 96 95 - 102 95 - 101 88.93Q3 85 - 95 92 - 100 93 - 99 86.43Q4 77 - 87 79 - 88 82 - 88 75.69Year 85 - 95 90 - 97 90 - 96 84.47
Green figures are actual data from USDA. Blue figures are estimated using USDA data **CME Lean Hog Index 8/15/14
June 2014 Hogs & Pigs -- Price Forecasts
From information, knowledge
Paragon Economics, Inc.
What do I expect over the next 2 years? Low costs vs. ‘10-’13 except for
drought- Corn $4 to $5 with some $3s and,
maybe, $6s- Meal $300-$400 with some top side risk- ISU (old) cost model: $70-$80/cwt
carcass Demand will stay strong barring an
export disruption or major food safety event- Positive views of protein and animal fats
and bad view of carbs and trans-fats continue
- Beef prices will stay high through 2016- Exports will grow but at a slow(er) rate
From information, knowledge
Paragon Economics, Inc.
What do I expect over the next 2 years? Slow BH growth this fall—previous
factors Regardless of PEDv development I
expect rapid growth (3-4%) in 2015 – with siting challenges being the potential roadblock
2015 and beyond depends heavily on PEDv prevalence, vaccine, management
Weights will stay high until space is tight – and maybe from now on!
A potential MESS in 2016 – supplies, capacity in Q4
From information, knowledge
Paragon Economics, Inc.
If you would like more of my work . . .
CME’s Daily Livestock Reportwww.dailylivestockreport.com
National Hog Farmers’ North American Preview
www.nationalhogfarmer.com
From information, knowledge
Paragon Economics, Inc.
Questions or Comments?
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