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National Pork Industry Conference Recap · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Hog Market Talk Podcast.
• 0:06
  SPEAKER_00: Your weekly deep dive into Hog Market Fundamentals, breaking news, and industry insights.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:26
  SPEAKER_01: It's great, Mike.
• 0:26
  SPEAKER_01: How are you doing today, man?
• 0:27
  SPEAKER_02: We're doing really good.
• 0:28
  SPEAKER_02: And now it's Thursday.
• 0:30
  SPEAKER_02: Normally we do this Wednesday.
• 0:32
  SPEAKER_01: Oh, yeah, we were we were at a little deal.
• 0:35
  SPEAKER_01: Sorry about that, buddy.
• 0:36
  SPEAKER_02: So I wanted to catch you after NPIC this week.
• 0:40
  SPEAKER_02: Get you out of the pool into the podcast room and just see what your stance is.
• 0:45
  SPEAKER_01: I tell you what, it was hot.
• 0:46
  SPEAKER_01: We needed the pool.
• 0:48
  SPEAKER_01: You know, it was it we we had a warm NPIC, but it's a great NPIC, Mike.
• 0:52
  SPEAKER_01: Uh that it that is a wonderful seminar, a wonderful conference.
• 0:55
  SPEAKER_01: I I don't know the final the actual number, but I think it was like somewhere around 1200.
• 0:59
  SPEAKER_01: Apparently it was record uh attendees.
• 1:02
  SPEAKER_01: Uh it's held at the in Wisconsin NPIC Kal Hari Resort, beautiful facility for holding large-scale meetings.
• 1:09
  SPEAKER_01: There's also this like little water park wrapped around it, right?
• 1:12
  SPEAKER_01: Um, indoor, outdoor.
• 1:13
  SPEAKER_01: So very family friendly.
• 1:15
  SPEAKER_01: So lots of kids, lots of family.
• 1:17
  SPEAKER_01: I mean, and and it's got good content, good agenda, but it's built to have time for networking and and and and getting to spend time with customers, friends, allied industry, all that.
• 1:26
  SPEAKER_01: So it's a great conference, huge success.
• 1:28
  SPEAKER_01: Yeah, we just got back from it last night.
• 1:31
  SPEAKER_01: Um, I would say, you know, kind of high points.
• 1:34
  SPEAKER_01: I mean, a wide variety of topics covered, but what were the hot topics in MPIC?
• 1:38
  SPEAKER_01: You know, health continues to still be, you know, a challenge for us in the industry, right?
• 1:43
  SPEAKER_01: So a lot of discussion around health, like that's not changed.
• 1:47
  SPEAKER_01: Um uh I would say that uh freedom to operate, uh, specifically is you know, NPPC, National Pork Producers Council had a lot of stage time just continuing to bolster up for finding you know support for their initiatives, Prop 12 fix, save your bacon act, you know, those type of things.
• 2:06
  SPEAKER_01: Um, just challenges that continue to come come against us.
• 2:09
  SPEAKER_01: Uh that was major.
• 2:10
  SPEAKER_01: Uh AI uh uh and and how you're gonna implement that, drive that into your business and your models and your strategy, huge AI focus.
• 2:20
  SPEAKER_01: We we actually we had we had we were breakout speakers and and half our breakout, we're we're really big into AI and moving our models forward.
• 2:27
  SPEAKER_01: We announced Pro Ag Power AI, our new model that's coming soon.
• 2:31
  SPEAKER_01: Um, so that was that was right on cue with industry needs.
• 2:35
  SPEAKER_01: Huge success for us to launch that.
• 2:36
  SPEAKER_01: We're super excited about that.
• 2:38
  SPEAKER_01: Um then uh demand.
• 2:40
  SPEAKER_01: Demand was a big discussion, which is the discussion in the pork industry.
• 2:45
  SPEAKER_01: We protein demand is still high.
• 2:47
  SPEAKER_01: Pork needs to step into and and and and and and change some ways we've been doing it, uh, and so on and so forth.
• 2:54
  SPEAKER_01: And you know, again, we nothing moves, Mike, as fast as you want it to, right?
• 2:58
  SPEAKER_01: We're all action-oriented people, uh, but we're we're making progress.
• 3:02
  SPEAKER_01: I would argue not fast enough yet, but we we kind of the NPIC highlighted that.
• 3:07
  SPEAKER_01: So Sunday night, big welcome reception, family friendly, right?
• 3:11
  SPEAKER_01: We featured uh a couple different products, Holestone actually, a couple different new products of theirs, a coppola steak, a plume of pork, um, you know, more uh just different, smaller, uh higher marbled type cuts on the hog.
• 3:25
  SPEAKER_01: So big feature there.
• 3:26
  SPEAKER_01: There was a schnitzel, which is uh a German, it's a pork tenderloin, if you will, feature on that.
• 3:31
  SPEAKER_01: Uh uh some sausage features.
• 3:33
  SPEAKER_01: I mean, we so we we didn't just show, you know, the straight up ribs and loins, right?
• 3:38
  SPEAKER_01: So feature that also for the pork industry, you know, ground pork is is a huge opportunity for us.
• 3:43
  SPEAKER_01: Again, we're not, you know, we're we're moving slow and it again, innovation, it's it's it's it's it's around new products, but it's also around change and process, right?
• 3:51
  SPEAKER_01: We have we have more ground pork lines in plants today than we did a year ago, significantly more.
• 3:56
  SPEAKER_01: We have way more to go, Mike, right?
• 3:58
  SPEAKER_01: But we all know how much hamburger costs, we all know the flavor profile of ground pork, right?
• 4:02
  SPEAKER_01: So demand a huge, huge function at function and discussion at the conference, which was spot on.
• 4:07
  SPEAKER_01: It's what we need to be be focused on.
• 4:09
  SPEAKER_01: So just to call out, thank you to the 21st century group for again organizing a world-class conference.
• 4:15
  SPEAKER_01: Thank you to all our customers, our friends, our allied industries.
• 4:18
  SPEAKER_01: Yeah, for ProAg, it was a it was a great conference, Mike.
• 4:21
  SPEAKER_02: Let's start working on the futures here, Luke.
• 4:24
  SPEAKER_02: We've been able to get a futures market on a little bit of a rally, uh, really since going back to about the middle of June.
• 4:30
  SPEAKER_02: We found a low, local low for the short term here.
• 4:34
  SPEAKER_02: Uh, tell me a little bit about what you've been seeing on futures on this rally.
• 4:38
  SPEAKER_02: Technically, we're not quite to the 100-day moving average quite yet at 8838.
• 4:44
  SPEAKER_02: Um, but just tell me some of the reasoning for this little rally and what you see.
• 4:48
  SPEAKER_01: Yeah, well, we've been working, we're working up, we're going the right direction, right?
• 4:51
  SPEAKER_01: And I I think 26, it's really kind of manifested itself very much in first half a year, second half a year, right?
• 4:58
  SPEAKER_01: And we've talked about this before.
• 4:59
  SPEAKER_01: Also, I'll go through like the last, you know, what happened already super fast, but we performed really well in Q1.
• 5:04
  SPEAKER_01: Pork price was good.
• 5:05
  SPEAKER_01: Q2, some things changed.
• 5:07
  SPEAKER_01: One led by inflation specifically, uh, high fuel prices at the pump.
• 5:11
  SPEAKER_01: That's stung.
• 5:12
  SPEAKER_01: It's that's that's hurt our demand.
• 5:14
  SPEAKER_01: The the consumer dollar, the protein consumption is good, but the pork pork didn't fare as well through Q2 uh for for a couple different reasons.
• 5:23
  SPEAKER_01: Um, but uh we really kind of fell down in Q2, right?
• 5:27
  SPEAKER_01: Uh it uh it's been hot here the last 10 days.
• 5:30
  SPEAKER_01: We got a little hot through the weekend, then hopefully some some easing of temperatures, right?
• 5:34
  SPEAKER_01: But May and June, those are the really good growing months.
• 5:38
  SPEAKER_01: So this year corn is reasonably priced, revenue is still reasonably good.
• 5:43
  SPEAKER_01: So everybody worked on making their pigs big, um, especially to offset for some health holes.
• 5:48
  SPEAKER_01: Plus, we've imported some more uh uh especially live hogs, Eastern Corn Belt, more Canadian hogs down, right?
• 5:54
  SPEAKER_01: Just we basically have had the same amount of hogs year to date, and they're about five pounds heavier.
• 5:58
  SPEAKER_01: That's three percent more pork on the market here through today.
• 6:01
  SPEAKER_01: And it's just it's it's we've had a lower cutout, right?
• 6:04
  SPEAKER_01: So that's that's the bad.
• 6:05
  SPEAKER_01: The good is we can build some demand up from these prices, right?
• 6:09
  SPEAKER_01: And then two primals that really needed to move for us to do that is the belly and the ham.
• 6:14
  SPEAKER_01: Okay, we're in like the lowest supply of our year, and we've got you know, we had lower like 120, 130 bellies.
• 6:21
  SPEAKER_01: Like we can we can feature that, we can sell that, right?
• 6:24
  SPEAKER_01: So, you know, we've made these comparisons to 24 multiple times to our clients, and it it is shaping up like that.
• 6:31
  SPEAKER_01: We we felt like the discounts, not so much in the August.
• 6:34
  SPEAKER_01: The August actually has a heck of a premium kind of you know dialed in here for this week versus historical, right?
• 6:40
  SPEAKER_01: But these discounts that we had, uh you know, awk and decent afford, like the market's correcting those, right?
• 6:45
  SPEAKER_01: And we're we're seeing that manifest itself in in some nice movements.
• 6:49
  SPEAKER_01: Um, you know, the old adage, you know, on Memorial Day, we eat T-bones and ribeyes, and Labor Day we're eating hot dogs, just the consumer dollar gets a little tighter as you go through the summer, the vacations, the spends.
• 7:01
  SPEAKER_01: Pork's got a value proposition, and we're we're seeing that.
• 7:04
  SPEAKER_01: Plus, you got a few bull every day, right?
• 7:06
  SPEAKER_01: I mean, though the front end's got to perform cash hog trade this week.
• 7:10
  SPEAKER_01: It was uh it was good.
• 7:11
  SPEAKER_01: 101s traded, uh, so we kind of inched up a new cash high.
• 7:15
  SPEAKER_01: Didn't even have all packers really bidding.
• 7:17
  SPEAKER_01: I had several packers bidding, right?
• 7:19
  SPEAKER_01: Um, a little bit uh nice move in the front end and product continues to to kind of continue to march it.
• 7:25
  SPEAKER_01: We are up again here midday.
• 7:26
  SPEAKER_01: Good.
• 7:26
  SPEAKER_01: We're we're just seeing those.
• 7:28
  SPEAKER_01: I said that you know, like we need the ham and the belly to move, and we're we're seeing kind of the right direction.
• 7:32
  SPEAKER_01: So uh futures is responding.
• 7:35
  SPEAKER_01: Um, that's great.
• 7:36
  SPEAKER_01: Uh, you know, and then also, you know, next summers, don't don't shy away.
• 7:40
  SPEAKER_01: Next summers are trading in the upper 90s.
• 7:42
  SPEAKER_01: There's a nice margin there on pigs, too.
• 7:44
  SPEAKER_01: Um, so the boards we you know it's it's reacting, we're getting the right kind of price direction.
• 7:49
  SPEAKER_01: That's good.
• 7:50
  SPEAKER_01: I would say as we went through the conference, I mean, in general, like what's again, I mentioned health was a big topic, right?
• 7:56
  SPEAKER_01: And so we definitely have had health challenges.
• 7:58
  SPEAKER_01: Purs is definitely a deal, right?
• 8:00
  SPEAKER_01: And what it's what I think a way to kind of manifest this is, you know, in and maybe a more normal year.
• 8:06
  SPEAKER_01: We've always fought shrink and health, you know, and maybe we're 88 or 90 percent full value pigs across the industry, right?
• 8:13
  SPEAKER_01: Okay, well, the the the separation is growing, the variation.
• 8:17
  SPEAKER_01: So that's part of the reason why we've had equal supply to a year ago, uh just on live headcount is because the good pigs, the good salfarms, like they're kicking butt, Mike, right?
• 8:26
  SPEAKER_01: So that group maybe it's 95 or 97 full value, but the flows that are challenging, you know, remember like 70, right?
• 8:33
  SPEAKER_01: And 75, so it's so it's mixing together.
• 8:36
  SPEAKER_01: But you know, we maintain excited about the industry that the tone was good.
• 8:40
  SPEAKER_01: You know, everybody's a little disappointed this summer didn't do what what futures had said it would do, right?
• 8:45
  SPEAKER_01: Back in the start of Q1.
• 8:47
  SPEAKER_01: But as we look forward, uh, you know, the market is responding well.
• 8:50
  SPEAKER_01: Let's build on it.
• 8:51
  SPEAKER_01: Uh, we see some good things and let's take advantage of these opportunities.
• 8:55
  SPEAKER_02: I'm looking forward to this area, just about two bucks higher if we get a chance on a lot of these hog futures.
• 9:01
  SPEAKER_02: Uh, gonna be some really interesting resistance areas, both on the chart and just with uh producer selling as well at those opportunities for potentials.
• 9:09
  SPEAKER_02: So uh the next couple bucks here in that D that's gonna be very interesting for me to kind of watch.
• 9:16
  SPEAKER_02: Dece that puts you right at almost 80 bucks.
• 9:18
  SPEAKER_01: Yeah, yeah.
• 9:19
  SPEAKER_01: So for sure.
• 9:19
  SPEAKER_01: And and I I mean this it's just watch this thing here.
• 9:22
  SPEAKER_01: It's uh we're have a close eye on this market here the next couple of weeks, and hopefully we'll get some follow-through.
• 9:27
  SPEAKER_01: I think we can, and yeah, give us some uh better hedging opportunities, Mike.
• 9:30
  SPEAKER_02: That we will.
• 9:31
  SPEAKER_02: All right, please click the link down below to get our uh one daily market commentary, two other marketing research, and please go to our website at professional.com and to uh see any about us or any other things we offer.
• 9:44
  SPEAKER_02: We'll be heading out on our crop tour here the first week of August, for example.
• 9:48
  SPEAKER_02: A fun activity to really follow throughout the United States, and uh maybe we'll even get to see some of you out there.
• 9:55
  SPEAKER_02: So thank you for listening in today.
• 9:56
  SPEAKER_02: Thank you for joining us, Luke.
• 9:58
  SPEAKER_02: I appreciate your time.
• 9:59
  SPEAKER_01: Have a good one, man.