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April 17, 2020
In this week's market recap, podcast host and Provimi market analyst Dave Bauer discusses pork exports for the week and talks about the rare two-headed black Swan — the first head being that of our consumer-led economy being sheltered from eating out and second being that of the domestic supply chain being backlogged by kinks in logistics and packaging. If not for record setting, U.S. pork exports, one could estimate current cash prices for hogs to be yet another $5 or $10/cwt., or even more, below today's prices.
"I'll remind everyone that there is plenty of meat and food out there to refill store shelves and in an effort to help rectify some of the supply chain issues, USDA did announce this week that it will ease labeling requirements covering fresh and frozen produce, meat, fish and certain nuts aligned for products that have been packaged for food service operators to now be diverted to retail outlets," Bauer notes. This effort will start on April 20, and it's to run for approximately 60 days. Ag secretary Sonny Perdue also announced plans this week to buy milk and meat from U.S. farmers as part of an initial relief package designed to help offset some of the impacts being felt at the farm level.
On the topic of forward profitability, Baurer advises not to make too many long-term decisions based on today's forward curve. Over the next 30 days or so, we could see drastic changes to current pricing structures, and although there will still be difficult weeks ahead, we'll likely be working through the toughest parts in the next few weeks.
And what should we be thinking about for next week? Bauer says packer warnings for producers to be ready to slow down performance due to COVID-19 creating slowdowns or even closures at the plant level are now upon us and efforts to reduce weight to market have begun in earnest. Bauer is advising that you focus on creating better production efficiency in your system, lean on your suppliers for help and finding ways to reduce tonnage to the market and be diligent in creating your team for success. These are unusual times and it will pay dividends to be well prepared.
Feedstuffs Precision Pork is about giving you the information you need to run a more precise pork system. If you have questions on this week's recap or want to discuss something in more depth, just ASK DAVE.
Thanks for following and, as always, make sure you plan today for tomorrow's success.
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