Chinese pork reserve version – ASF South Korea

calendar icon September 28, 2022

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4 minutes to read
  • US hog futures took a hit last Friday due to two reported events. The first is the third release of pork reserves in China and the other is the ASF separator in South Korea. we took:

China’s release of pork reserves should be positive for the market, not negative. This third release of pork reserves indicates the Chinese government’s attempt to lower the prices of domestic pigs. So far, the price of domestic pigs in China has continued to rise despite the release of pork reserves on September 8The tenth18The tenth, And now at 21Street, third batch. No one seems to know how much pork is being released. It would have to be a huge amount to impact the market of 1.4 billion people who eat pork.

china pig price
yuan / kg Live weight in US dollars
April 1 12.59 90
June 1 15.81 1.07 USD
August 1 21.68 $1.45
September 1 22.76 $1.49
September 16 23.72 1.53 dollars
September 23 24.29 1.54 dollars

As you can notice from the pricing above, the price of pigs has actually gone up with the release of China’s pork reserves in September. Last week was the highest price in 2022. There is no doubt in our opinion that the massive liquidation of China in the latter half of 2021 and the first part of 2022 has cut production. We anticipate that the only way China can stem the rise in pork prices is by increasing pork imports. We anticipate that the Chinese government will favor pork imports over inflation, which will drive up domestic pork prices.

It doesn’t make sense to us why US futures are down due to the ASF break in South Korea. Any country that has so far ASF breaks ends up very quickly driving up pig prices, especially in a pork-importing country like South Korea. At the ASF break in South Korea, we were with South Korean Genesus customers last week. They expect, like previous ASF breaks in South Korea, that it will be quickly contained and will have little impact on Korean pork production or prices.

Last week, market hogs in South Korea were KRW 5,425/kg of carcass at $1.77/lb.

other notes

  • Beyond Meat The Chief of Operations ran into legal problems when he bit someone else’s nose after a football game at the Arkansas Razorbacks. Beyond Meat (NASDAQ: BYND) stock fell from $234 per share to $15.69 last week. Last year, it lost 86% of its stake value. Also, McDonald’s appears to have discontinued the Beyond Meat burger experience. There is no doubt that consumers do not buy counterfeit burgers. Taste matters. You must be wondering how investors will view the counterfeit meat industry moving forward with billions of dollars lost thus far. You wonder what would happen if that money was invested in producing real meat to produce innovative products that taste better.
  • The Danish crown announced last week that they are cutting the slaughter of pigs in Denmark. Fewer pigs are available due to the liquidation of the herd; The Danish herd is down 6% according to the latest data.
  • Latest American slaughter weights are 279.6 lbs. A year ago 281.9 lbs. 2.3 lb pigs. Lighter than last year. We learn that some packers strongly encourage pigs to slaughter. We have lighter pigs and fewer killings per week than last year. He tells us that pigs are lower than they were a year ago. There is no reason that this does not support the price.
  • One of the factors affecting all agricultural exports including pork is the strength of the US dollar which makes US products less competitive in world markets. The US dollar against the euro was 0.85 a year ago, and last Friday 1.03. The US dollar index (a group of foreign currencies) before the year was 93, and closed last Friday at 111. A higher dollar limits pork exports compared to other suppliers and makes pork more expensive in the currency of buyers’ countries. The positive side is that in most countries the price of pig (pork) is high, and our main export competition in the European Union has high pig prices.
  • The largest pig genetics company in the world is Genus plc (PIC). It is a publicly owned company on the London Stock Exchange (LON: GNS). The value of their share before the year was 5,575 pounds, and last Friday, 2,818 pounds. The pig industry has been hit hard over the past year as pig clearance has not fared much better in China, Europe and the USA. Whether it is pig producers, packers, feed companies or gene suppliers, the impact of the global industry contracted due to ongoing financial losses affects everyone. The pig cycle is alive and well, and we expect a lower global supply of pigs to drive up pig prices. The cliché of high tide excites every boat that comes to mind.

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