FEEDSTUFFS PRECISION PORK Market Report – October 23

Pork packers this week passed another milestone by reaching a
daily kill of 492,000 head on both Wednesday and Thursday. But it
takes a big Saturday kill to make a run at a weekly number over
2.7 million head, says Dave Bauer, senior market analyst with
Provimi, in this episode of Feedstuffs Precision Pork.


Although a couple of weeks ago, a 289,000 head kill on Saturday
produced that 2.73 million head weekly run, Bauer notes that is
difficult to sustain. As Steve Meyer said on this week’s Global
Hog Industry Virtual Conference, if the packer runs his labor
force too hard on Saturday, they aren't going to show up on
Monday. So, the 96% capacity that the packers are pounding out
each week might be close to the new normal.

The U.S. Department of Agriculture also released the September
cold storage report this week, and instead of the three-year
average of 2.5% growth in the August to September frozen pork
supplies this year, we just saw a 0.25% increase. It would have
been a 2% reduction, but USDA went back and revised downward the
August inventory by 2.25% in the process. Speaking of revisions,
USDA also revised August hams lower, but it wasn't due to fewer
bone-in hams being processed. Bone-in hams were actually revised
slightly higher, but the boneless hams were revised lower by
2.75%, suggesting potentially better rather than a lack of
inventory.


Talk from Chinese officials that fourth quarter pork production
will be up 30% over last year, just in time for their upcoming
lunar new year holiday, may be something to keep an eye on.


What’s all this mean for profitability? Bauer
explains. 

These are uncertain times and it will pay dividends to be
well-prepared. If you have questions on this week’s recap or want
to discuss something not covered, feel free to ASK DAVE
at David_Bauer@cargill.com. Plan today for
tomorrow’s success.


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