Lean Hog Market Going Whole Hog

Lean Hog Market
( Jennifer Shike, Farm Journal's PORK )

African Swine Fever continues to spread across the globe. Government officials in Vietnam say the country has culled more than 1.2 million pigs infected with ASF now in 29 Vietnamese provinces. Meanwhile, a fourth South African province has also reported an ASF outbreak. That's on top of the 30% to 50% of hogs impacted in China.

As John Payne, author of the Swine Times newsletter and Daniels Trading tells AgDay's Clinton Griffiths, ASF is now pulling pork in many different ways.  

"I think we all look at China [because] they're the ones with the big supply and the big demand picture, but it's all across southeast Asia right now," says Payne. "Those are all bullish factors longer term."

Payne says what's also bullish are possible changes to how pork is exported.  

"I've heard some talk recently that [processors] might be exporting full carcasses now," says Payne. "That's out of the norm as we tend to export products [like] the bellies and the butts."

Payne says he's hearing that physical carcasses might be headed overseas because pork supplies are getting so low.

"The numbers are sketchy," says Payne. "We're all dealing from the same grocery store and so if they want to buy from Europe, those who usually buy from Europe will buy from us." 

He thinks that could be bullish going into summer. While lean hog futures took a breather in recent weeks, prices are now ticking back up with front-month contracts above $90 cwt.

"We're coming into the time of the year where you tend to see the summer contracts perform," says Payne. "We're cheaper than we were going into the Fourth of July last year on that July contract."

Payne says from a price standpoint, it's hard to track whole hog sales since most reports focus on cutouts or box shipments.