Uptick in futures, markets provides breathing room

Producers have opportunity to repair some of the financial wounds inflicted by COVID-19.


Joseph Kerns, Kerns and Associates

via National Hog Farmer - Feb 15, 2021


Pork producers that have survived the throes of COVID-19 and the subsequent upheaval in the markets are finally able to print black numbers with the uptick in the futures and cash markets. This breathe of fresh air was long awaited, and if we are anywhere close to right, could allow us some decent profits for 2021 and set the stage for opportunities in 2022. When was the last time we could say that?


The backlog of animals that has plagued the supply side has finally subsided to a degree that resembles something closer to a normal balance of shackle space relative to market-ready inventory. There are a couple things at play from our in-barn management when things were really backed up to the recent spate of farrowing house disease that have impacted production. The transition from a few too many to not enough is on the horizon and markets are responding accordingly.


Per the table below, as derived from the most recent USDA “Hogs and Pigs” report, total production in 2021 is not scheduled to move the needle much relative to last year, but the feel of the market as well as demand (more on that later) is one of shorter supplies than implied by the report. This scenario is setting up nicely for the pork production community to post profits and make decisions about their operation’s future in a more positive economic light...


more, including table, charts [3]