Money Matters: Top Five Stories of 2018

Kent Bang's Top Stories of 2018 ( MGN Image )

Kent Bang delivered a packed 2018 full of advice to help producers improve their bottom line. Take a look back at his top five stories this year. 

1. Betting the Farm on Chinese Pork Demand
African swine fever continues to spread in China, with the number of farms reporting outbreaks surging well over 70 at this point in time. While the country is doing what it can to limit the spread of the disease – banning pig and pork movement from provinces with positive herds and banning pig movements from the provinces that border them – it will likely not stop the spread of this disease. Read more.

2. 2019 Outlook Contains Many Variables
Live hog prices improved dramatically from late August through early October, moving against seasonal trends due to factors we are all reading about every day and trying to understand. Market factors, which are always complex, became much more complex with the African swine fever (ASF) outbreak in China. In addition to that potential impact on global pork prices, the trade war going on with major export destinations continues to make marketing and business decisions a challenge for the pork industry. Read more

3. What Successful Pig Farms Look Like
Over the past 30 years, U.S. producers have outpaced all others, becoming the most competitive pork production system on the globe. The improvements we have made, driven by producer innovation, consumer demand, economic forces and other factors, have evolved the industry and made it more competitive on a global scheme. At the end of the day, what drives the industry also drives the competition in the U.S., leaving some production methods and some producers in the wake of change. Evaluating what makes our production system globally competitive can also be important to the individual farm and future success. Here are some thoughts about how we got here and how we move forward to continue improvement in the years to come. Read more.

4. Are You Prepared to Survive a Trade War?
The U.S. pork industry has been fortunate. Producers have enjoyed strong demand for pork over the past several years and especially in the past 18 months. Demand for U.S. pork on an international basis in 2017 reached a new record of 1,905,186 MT with a total value of $5.3 billion. Pork variety meat was also at a record volume with 543,973 MT sold to foreign markets in 2017. Variety meat exports were more than $1 billion for the first time in history, with $1.173 billion in sales. The total combined export value was $53.47 per head produced in the U.S. in 2017. Read more.

5. Managing Through Volatile Times
The swine production business has always been an industry marked by price cycles of significant losses and profits. While it was more predictable in the past, profit cycles remain volatile and painful when you get caught in them after events that cause reductions in working capital and hence, increased leverage occurs. Those events might include expansion or an acquisition, or they could be related to animal health issues. Some events make it difficult to hedge pigs as you normally would, and you stay open to the market. Basis changes might eliminate what you thought you had locked up for margins. Read more.