November 18, 2019
US slaughters more swine to profit from high margins
While sales of US swine to China are increasing, it is being hampered by high tariffs imposed on US swine in 2018 as a result of the US-China trade war, reported Reuters.
The US Department of Agriculture (USDA) estimates 2.75 million swine will be slaughtered this week, compared to 2.69 million last week and 2.63 million in 2018, reported Reuters.
This comes off the back of increased global pork prices, with US meatpackers and producers expecting more swine sales to China. The spread of African swine fever in China has resulted in shortfall of swine supplies in the country.
According to HedgersEdge.com, margins for meatpackers have gone up to US$87.60 per head from US$68 one week earlier.
The USDA reported 5,549 tonnes of US swine meat sales to China between November 1 - 7, 2019, the biggest in a month. Shipments of US swine to China hit 10,933 tonnes in total during the reporting period.
Yet sales of US swine are hampered from steep tariffs that China imposed in 2018 as part of the US-China trade war.
Lean hog futures reported its lowest price on the Chicago Mercantile Exchange (CME) for December since September 11, 2019, finishing at US$0.450 at US$63.200 per pound. February prices fell US$1.375 cents to US$72.000 cents per pound.
1,431 tonnes of US beef were also exported to China between November 1 - 7, 2019. The USDA reported this was the biggest purchase from China since May 2002. A ban on beef exports to China from the US was only lifted in 2017.
Live cattle futures in February increased slightly by US$0.050 to US$124.975 per pound. Feeder cattle in January went up US$0.225 to US$144.275 per pound.