The U.S. slaughter industry is centuries old and has taken decades to get where it is today. Still, claims against the industry over the past year have some questioning whether it should be dismantled.
In this episode of Feedstuffs Precision Pork, Dave Bauer, senior market analyst for Provimi, provides his perspective on the slaughter sector and why he believe during the time of crisis, like the industry has been in, is not when such ideas should be put in motion.
So maybe it's not time to destroy the house they built just yet, but rather figure out how it can be more efficient and effective, says Bauer.
As an industry he noted, we've come to rely just as heavily, perhaps even more so on the U.S. Department of Agriculture’s weekly pork exports. Bauer raise the discussion point of who has controlled that in the past year. Yep, China.
That said, China's rate of importing commodities is slowing as the global COVID resurgence has led China to impose greater limitations on import testing. So what’s the market look like and what’s ahead, Bauer walks us through his thinking. In doing so, he notes that the U.S. cannot rely on exports alone to get it out of the current supply issue. Disrupting plants won't work either. Nobody wants to hear it, but the solution would be to reduce production, says Bauer.
And what's the word on forward profitability? Well, strong pork export trends through July translated into strength in cash hogs, pork products and futures contracts, providing measurable improvement in margin. But again, to be clear, Bauer points out that those price improvements merely helped to reduce losses, not put producers in the black,
The most positive note, he said, is that weights have now fallen to 208 to 210 lb. per carcass. What does that all mean? Take a listen.
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.