The Ever.Ag Podcast

Hog Talk – July 11, 2024


Listen Later

In the latest edition of the Hog Talk podcast from Ever.Ag Insights, we lay out the major market influencers heading into August and Labor Day. Also, there’s talk of a once-shuttered pork plant in Iowa coming back online. What does that mean to the hog industry? How do producers stay profitable while balancing a need to cut production? And where does the market go from here?

Join host Mike McGinnis and panelist Joe Kerns for a spirited discussion.

Questions or comments? Topics you’d like to hear us discuss? Contact us at [email protected].

Show Transcript

(Transcript auto-generated)

00;00;00;10 – 00;00;08;26

VOICEOVER
Future trading involves risk and is not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;08;28 – 00;00;27;02

MIKE
Hello and welcome to Hog Talk, brought to you by Ever AG Insights. Each week we talk with subject matter experts on news and topics affecting the hog market. I’m your host, Mike McGuinness, and today is Thursday, July 11th, 2024. We have a special guest, Joe Kearns, ever EGS president of the Livestock Division, and we want to welcome Joe to the program.

00;00;27;03 – 00;00;44;00

MIKE
Thanks for having me. You bet. Let’s take a look at the market action real quick before we get into the questions here. August lean hog futures prices held steady in June. They have weakened a bit in July. Today that’s trading around 8690 per 100. Wait. Just give us a quick reaction to the market action here in the summer.

00;00;44;02 – 00;00;45;21

MIKE
And we came into the spring.

00;00;45;21 – 00;00;47;26

JOE
And come on call the market price.

00;00;48;03 – 00;00;52;07

JOE
Actually happening across the board on account for her homework.

00;00;52;13 – 00;01;04;03

JOE
Fired by what we would now call unbridled optimism here. We got a little come for a month, not very long, but that’s been a long time. Early on in the year, they’ve taken their marbles.

00;01;04;03 – 00;01;08;26

JOE
And gone home not only that side of the market and now carrying some pretty good.

00;01;08;26 – 00;01;13;12

JOE
Doubt that we’ve got something here. Them out of the top.

00;01;13;12 – 00;01;18;06

JOE
Of the hill that occurred probably under the thumb at the money moment.

00;01;18;06 – 00;01;24;03

JOE
Yesterday. Market activity was very negative on their moment near record like we had in the morning.

00;01;24;03 – 00;01;30;28

JOE
And at the seventh largest day ever in the history of the country yesterday, under some ground rules, gravity.

00;01;30;28 – 00;01;32;10

JOE
Defying type of.

00;01;32;10 – 00;01;45;00

JOE
Price movement there, the funds have had their way with that market early. And I think because of that and the that turnover. Yeah, I have not heard a lot of activity coming into the market. And I thought.

00;01;45;03 – 00;01;56;23

MIKE
Well, we’re going to get into some more of the fundamentals in just a bit. But the top minds of the industry came together this week for the National Pork Industry Conference in Wisconsin. What were the highlights that came out of that? Joe? What’d you come away with?

00;01;56;29 – 00;02;20;21

Not only one that some point they were over 900 people were very large. 28 now that that’s gone on the run, that the 21st century group culminated in quite an excellent job of put it together in an environment conducive to families in any other cocktail capital at the water park. And so a well attended, well-run program in that area.

00;02;20;24 – 00;02;27;00

MIKE
And what did people talk about? What were some of the topics that came to the top, so to speak? The overriding theme?

00;02;27;00 – 00;02;50;19

JOE
What has been knocking on the carrot that we’ve experienced in the bond production? And here I think down 23.5, was the worst year ever, financially kept on a dime than we’ve ever had in corporate, and we were looking for a bit of a rebound. Know 24.5 earlier, we had an opportunity to have a project. Those opportunities have gone by the wayside and take a look at the market right now.

00;02;50;19 – 00;02;53;21

JOE
We are going to be unprofitable in 2020 for.

00;02;53;21 – 00;03;00;24

JOE
Kind of a couple of years out into the mid 2025, that it doesn’t get any better. I don’t remember coming on a three.

00;03;00;24 – 00;03;05;22

JOE
Year, rant and an industry, and I would hear what I’m getting.

00;03;05;22 – 00;03;13;01

JOE
The bankers involved in the conference also on and on and on for their financial help and to the point that I think.

00;03;13;01 – 00;03;17;20

JOE
It’s almost impossible to run that track that long because.

00;03;17;20 – 00;03;23;11

JOE
We literally run out of money, a that won’t run out of money and something will have to pay in between now and.

00;03;23;11 – 00;03;40;22

MIKE
That. What I was a great conference to bring some major players together and get somewhat of a look out into the future. Let’s talk about what’s going on right now. First off, the pork cutout, it’s softening. I was curious as to why you think that might be a slump in pork demand. Also, supply is holding steady. Do you think that combination may be a reason?

00;03;40;24 – 00;03;51;21

JOE
Well, I think that you can point out great things that we’ve got going on domestic demand, export demand, and then what the marketplace look like. I think any of them out of three are good. A lot of the.

00;03;51;21 – 00;03;55;05

JOE
National export from 9% year over.

00;03;55;05 – 00;04;01;07

JOE
Year prices are creating diet. That’s unheard of. Going to get higher volume. It’s got to occur at a lower price.

00;04;01;10 – 00;04;10;03

JOE
In order to do that, that volume that that what we’re thinking, there’s a myriad of reasons. European contract probably one of the largest one. You get that, don’t we?

00;04;10;04 – 00;04;21;23

JOE
In a price elasticity with the price of beef. And what might it might tell you about the prospects for the United States having gone and lock on coming into the meantime?

00;04;21;26 – 00;04;25;26

JOE
We have that we are trading on the retail side.

00;04;25;26 – 00;04;37;19

JOE
Of it at about $4.20 per pound. American premium here, disappearing for about an hour and a half. Apparently, the problem that we’ve got, Mike and we are only supplying the.

00;04;37;19 – 00;04;39;05

JOE
Market and we’ve got capacity.

00;04;39;05 – 00;04;54;10

JOE
From roughly 130 million Hawk in the current time on a yearly basis. And if we go up or down, but simply being able to in order to reduce the ban on on animal health care economics, I’m not saying that.

00;04;54;10 – 00;05;01;22

JOE
Packer animal control not only I’m not that these are heartening, but doing the best that they can, and they are very encouraged by.

00;05;01;24 – 00;05;07;26

JOE
The way that they have over there relative to cattle and therefore that leading to a lack of.

00;05;07;26 – 00;05;22;18

MIKE
Profitability. And so how long does that storyline last, this changing of shrinking hog and pork supplies to increase in hog and pork supplies as we go into the month of August and Labor Day? I mean, does that story line go past that? And, we did that our.

00;05;22;18 – 00;05;24;15

JOE
Hog entry for now. We got a wait.

00;05;24;15 – 00;05;29;15

JOE
Break up in various categories. And it would tell you that, roughly 101 and a half.

00;05;29;15 – 00;05;35;09

JOE
Percent are in the I can I can I have, I have back off and a reflection on.

00;05;35;09 – 00;05;50;12

JOE
The market probability that perhaps in late 2025 we start a reduction on a year over year number. But by what kind of diet have we had here right now for the next 11 months or something like that? You won’t be on the timeframe.

00;05;50;12 – 00;05;52;18

JOE
That you remember about the soft run.

00;05;52;19 – 00;06;11;03

MIKE
Down. And 25. We have the news report that’s out that we probably should talk about. This week, DTN is reporting that the shuttered Tyson pork plant in Perry, Iowa, may be reopening under new ownership, with the word May highlighted in bold. Yes. What would that mean, Joe, to the hog industry? Exactly what we need know.

00;06;11;03 – 00;06;18;17

JOE
We have the Wyndham facility that has gone down recently and and that reopening for the process animal, that Perry community. You might recall.

00;06;18;17 – 00;06;25;10

JOE
That they have in the community recently announced an economic tragedy on Tyson, by far the largest.

00;06;25;10 – 00;06;26;29

JOE
Employer in a reasonably small.

00;06;26;29 – 00;06;35;07

JOE
Town, threatening going back in and ordered all that community together and probably the best that are in industry have confirmed all exactly what we.

00;06;35;07 – 00;06;35;29

JOE
Need. We are going to.

00;06;35;29 – 00;06;44;14

JOE
Compress corn for packing capacity. I will reemphasize the back of morning of that announcement doesn’t get you a timeline nor help.

00;06;44;14 – 00;06;52;12

JOE
On the part of the plant that I won’t do that kind of thing correctly. The packing industry as a whole want to replant.

00;06;52;17 – 00;07;10;05

JOE
Have not wanted to come back online in order to compete with them under a different name. So I don’t get that. I don’t come up with a credit on that from the pork producers perspective. But that plant operating under a new name on obviously planet can be economically justified for them. And so and they don’t have that.

00;07;10;05 – 00;07;11;16

JOE
Ready for evaluation.

00;07;11;16 – 00;07;16;15

JOE
But the good news on the part of that packing to have the nearly.

00;07;16;15 – 00;07;17;15

JOE
Every turn, a little.

00;07;17;17 – 00;07;24;14

JOE
Bit of a pullback on grain price and helpful at that year enough to bring it back to profitability, we need the revenue side of.

00;07;24;15 – 00;07;25;06

JOE
A perked up.

00;07;25;08 – 00;07;35;20

MIKE
That final question is our so what segment. And I like this one because it really gets us down to the nitty gritty of what we’ve been talking about. What can producers and processors take away from this conversation.

00;07;35;23 – 00;07;44;27

JOE
That whatever money that we’re currently mired in is not going to get wiped clean any time? How it don’t go up by that point?

00;07;45;02 – 00;07;50;26

JOE
Yeah, I think we get a little bit more economic direction. Several months have not lived up to our expectation.

00;07;50;26 – 00;08;04;04

Or our home, and hunkered down for the coming into the fourth quarter. It does look like it’s not going to be compressed foreign capacity in relation to the supply available for that. That got down, but in reality, we call on that. We haven’t.

00;08;04;04 – 00;08;09;04

JOE
Even if I don’t like the answer, sometimes the green Bay Packers have, and I don’t like that either.

00;08;09;04 – 00;08;16;25

But I’ve got to accept the game plan. And right now we’re in one of the and look like it’s going to be like a throwback.

00;08;17;01 – 00;08;34;20

MIKE
All right. Very good Joe Kerns ever eggs president of the livestock division. Joe, thank you very much for having me. You bet. And thank you for joining us today. If you’ve enjoyed listening to Hog Talk, be sure to tell a friend or to and subscribe to us wherever you listen to your podcast. Thank you to the Drag Insights Crew for their work on today’s show.

The following music was used for this media project:

Music: Funky Intro 29 by TaigaSoundProd

Free download: https://filmmusic.io/song/9520-funky-intro-29

License (CC BY 4.0): https://filmmusic.io/standard-license

Artist website: https://linktr.ee/taigasoundprod

© Ever.Ag 2023, confidential and proprietary.

Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.

EVER.AG INSURANCE SERVICES IS A LICENSED INSURANCE AGENCY AND AN AFFILIATE OF EVER.AG. INFORMATION CONTAINED HEREIN IN THIS WEBSITE IS COMPILED FOR THE CONVENIENCE OF THE USER. INFORMATION IS OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE AND IS FURNISHED WITHOUT RESPONSIBILITY FOR ACCURACY OR CONTENT. MARKET DATA IS SUBJECT TO CHANGE AT ANY TIME. Ever.Ag is a licensed insurance agency in the following states: AZ, CA, CO, CT, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NM, NY, NC, ND, OK, OH, OR, PA, RI, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY.

The post Hog Talk – July 11, 2024 appeared first on .

...more
View all episodesView all episodes
Download on the App Store

The Ever.Ag PodcastBy Ever.Ag

  • 5
  • 5
  • 5
  • 5
  • 5

5

5 ratings


More shows like The Ever.Ag Podcast

View all
The Ramsey Show by Ramsey Network

The Ramsey Show

38,986 Listeners

The EntreLeadership Podcast by Ramsey Network

The EntreLeadership Podcast

4,390 Listeners

AgriTalk by AgriTalk

AgriTalk

153 Listeners

AgriTalk PM by Farm Journal Media

AgriTalk PM

134 Listeners

The Dividend Cafe by The Bahnsen Group

The Dividend Cafe

580 Listeners

The Business of Agriculture Podcast by Damian Mason

The Business of Agriculture Podcast

124 Listeners

The Milk Check by T.C. Jacoby & Co. - Dairy Traders

The Milk Check

21 Listeners

Progressive Dairy Podcast by Progressive Dairy editors

Progressive Dairy Podcast

19 Listeners

Dairy Defined by National Milk Producers Federation

Dairy Defined

4 Listeners

Grain Markets and Other Stuff by Joe Vaclavik

Grain Markets and Other Stuff

342 Listeners

All-In with Chamath, Jason, Sacks  Friedberg by All-In Podcast, LLC

All-In with Chamath, Jason, Sacks Friedberg

9,835 Listeners

Let's Chat Dairy by HighGround Dairy

Let's Chat Dairy

16 Listeners

The Dairy Download by IDFA

The Dairy Download

27 Listeners

Barn Talk by Tork and Sawyer Whisler

Barn Talk

1,649 Listeners

Dairy Insights: Heard Mentality by StoneX Group Inc.

Dairy Insights: Heard Mentality

8 Listeners