Pork Signals: 4 Indicators Profitability May Be Coming
Dennis DiPietre And Lance Mulberry, Knowledge Ventures, LLC
via FarmJournal's Pork - September 8, 2020
Letís start with an old familiar caveat, ďDonít count your chickens before they hatch.Ē However, there is a decent chance that profitability will return to the pork industry this fall, well ahead of forecasts that donít see much black ink until summer 2021.
Here are four indicators that we may see profitability return sooner than expected:
1.††† Costs remain very low.†
Interior Iowa corn prices per bushel are currently around $2.80 a bushel and soybeans are in the upper $8 range. Huge supplies and production, even though damaged by the derecho, have not substantially lifted prices. There seems to be a lot of uncertainty about the harvestability of some of the wind damaged crop, but exports of corn have been sluggish and, in many cases,, places to store the crop in Iowa are laying on the ground.
2.††† Beef retail prices are high.
High beef retail prices have substantially helped pork in the domestic retail market. Ground beef is about the only thing that has been competitively priced with many different pork cuts. Lots of pork specials rotating through the major cuts plus a substantial supply of frozen spareribs earlier in the summer kept the pork case supplied and the product moving even when COVID-19 outbreaks at the plants cut harvest and processing essentially in half for a short period. Exports, except for China, have been a cause for concern this year. While exports are up substantially in both quantity and value, it is all coming from one country Ė not a good sign.
3.††† Harvest plants are running at near capacity ...
4.†† Producers try to counter a counter-seasonal summer ...