Latest / Professional Ag Marketing Podcast / Industry Growth Plans | Hog Talk February 5th, 2026

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Industry Growth Plans | Hog Talk February 5th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_01: Welcome to the Hog Market Talk Podcast.
• 0:06
  SPEAKER_01: Your weekly deep dive into Hog Market fundamentals, breaking news, and industry insights.
• 0:12
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:20
  SPEAKER_00: All right, today is February 5th already, Luke.
• 0:24
  SPEAKER_00: But let's talk about the crazy week we've had.
• 0:59
  SPEAKER_00: I wanted to get your take on that a little bit.
• 1:01
  SPEAKER_00: And then just talk about, you know, we've we've been out and about a lot this week.
• 1:05
  SPEAKER_00: A lot of folks are out of the office, whether we be at uh the NCBA uh conference, Catalcon down there, uh, or yourself.
• 1:12
  SPEAKER_00: You're gone to a conference there at Pigski as well this week.
• 1:16
  SPEAKER_00: So I just wanted to see what uh the tone is at these shows that you've seen here this week and and just talk about what other people are talking about this week in these crazy market environment.
• 1:26
  SPEAKER_02: Yeah, absolutely.
• 1:27
  SPEAKER_02: Uh a lot of volatility, just you know, just geopolitical risks, trade risks, just I mean, those are good reminders on why we manage risks, right?
• 1:34
  SPEAKER_02: Right, Mike.
• 1:35
  SPEAKER_02: Um, yeah, no, this this past week just got back uh last night.
• 1:38
  SPEAKER_02: We had the opportunity to go out to uh pig ski conference in Colorado.
• 1:42
  SPEAKER_02: It's it's put on by Swinebet Center.
• 1:44
  SPEAKER_02: They did a great job with it.
• 1:45
  SPEAKER_02: And uh yeah, I mean, just continues.
• 1:47
  SPEAKER_02: We've rolled through now.
• 1:48
  SPEAKER_02: We had uh South Dakota Port Congress, Iowa Port Congress, Pig Ski.
• 1:52
  SPEAKER_02: Next week we'll be at Minnesota Port Congress.
• 1:54
  SPEAKER_02: So any any of our friends and and industry uh uh customers, whatnot uh at the Minnesota show, come see us.
• 2:01
  SPEAKER_02: But the you know, Mike, the tone, the tone continues to be positive.
• 2:05
  SPEAKER_02: We you know, this is that's not a new uh uh a new thing.
• 2:09
  SPEAKER_02: Uh 25 was a good year, 26 outlook's good, 27 outlook is now starting to look good.
• 2:15
  SPEAKER_02: So um, you know, I think if I can maybe talk about you know just a little bit on a on a on a bigger bigger scope.
• 2:21
  SPEAKER_02: We we we've held our source relatively stable, Mike, and and and and and and health health issues continue to to put some variation in supply, and it's it's it's no different this year.
• 2:31
  SPEAKER_02: We're having having health challenges.
• 2:33
  SPEAKER_02: PERS continues to seem like it's bigger, better, and tougher each year.
• 2:37
  SPEAKER_02: Um but I I'd say what's different, you know, and and you know, it was you know out at this conference we talked a lot about uh succession planning, long-term growth strategies, they had some nice topics in that, but just also, you know, what where how how are your assets positioned?
• 2:50
  SPEAKER_02: Where are your salfarms?
• 2:51
  SPEAKER_02: Where are your finishing barns?
• 2:52
  SPEAKER_02: And you know, I'd say it kind of started, it's been a slow tone, and but I I you know talking to contractors, talking to people doing bids, there's you know, there people are thinking it's getting to the point where people are thinking about maybe doing a little bit of of uh of reinvestment.
• 3:10
  SPEAKER_02: Now I want to say growth.
• 3:11
  SPEAKER_02: Um, there's always going to be some growth with that, right?
• 3:13
  SPEAKER_02: But I you know, I just think you look back at you know what our industry and and and the profit we had in in 25, and like I said, the profit curved forward.
• 3:21
  SPEAKER_02: It's just you know, some comments from some contractors is they've the activity they've had in bids for for either new projects, that's one, a lot of remodels, right?
• 3:30
  SPEAKER_02: We've got depreciating buildings, but we haven't really built any uh amount of new facilities for five years in this one of a grander scale, right?
• 3:38
  SPEAKER_02: Especially on the finishing specifically.
• 3:40
  SPEAKER_02: So, you know, as we're starting off 26, people are going, you know, finalizing their capex plans or executing their capex plans.
• 3:47
  SPEAKER_02: Where you know, our our industry over time with this kind of run, and we we typically expand or growing a little bit.
• 3:52
  SPEAKER_02: Um, you know, so that's I think just something to watch out.
• 3:55
  SPEAKER_02: Supply demand structures are awesome in our industry, Mike, and and it can still continue to be awesome.
• 4:01
  SPEAKER_02: But uh, you know, I think there's there's a few different things getting kicked around.
• 4:05
  SPEAKER_02: So, you know, just all be mindful of what we're doing to to optimize and put each of our own businesses in the best position.
• 4:11
  SPEAKER_02: But you know, we're we're you know keep a key keep an eye on long-term plans because there's there's there's there's gonna be some things happening.
• 4:18
  SPEAKER_00: More people are starting to to just look at a little bit of construction here, you know, and that's been the question is uh we've had a little bit of a good time now for for a little while, just kind of made up for the the stuff we lost there a few years ago in the hog industry.
• 4:33
  SPEAKER_00: How long is it gonna take before we start to build new construction again?
• 4:36
  SPEAKER_00: And it seems like people are poking around now, doesn't it?
• 4:38
  SPEAKER_02: Yeah, yeah, new construction also, I mean, hog barns are depreciating assets.
• 4:42
  SPEAKER_02: You have to reinvest them so they don't depreciate to zero, right?
• 4:44
  SPEAKER_02: So we've got some capital back in, we've got some returns.
• 4:47
  SPEAKER_02: So, you know, upgrading and and it uh and and reinvesting and extending your assets life with with with some investment this year.
• 4:55
  SPEAKER_02: It's just uh you know, these are all the good things and the things the growing industry needs to do, right?
• 4:58
  SPEAKER_00: So that health, did you hear much on health?
• 5:02
  SPEAKER_02: Yeah, I mean continues to be uh uh uh uh streaming around.
• 5:06
  SPEAKER_02: PDV is absolutely, and that's not a new thing, like I mean that like you know, learned at this conference, right?
• 5:12
  SPEAKER_02: Because you see it in the U of M database and our clients, but PDV is worse than a year ago.
• 5:16
  SPEAKER_02: There's no question, and it's a little confusing on on why it is, because there's a lot of things about PD that are really controlled with with strict biosecurity protocols, but PDV is absolutely worse than a year ago.
• 5:27
  SPEAKER_02: Um uh so no doubt with that, and and and um PERS, you know, PERS is is definitely in its uh heightened cycle.
• 5:36
  SPEAKER_02: I like to say, is it worse than a year ago?
• 5:38
  SPEAKER_02: I don't know.
• 5:38
  SPEAKER_02: I think it's tracking with a year ago.
• 5:40
  SPEAKER_02: Is it worth worse than the five-year trend?
• 5:42
  SPEAKER_02: But it's you know, it's it's absolutely uh you know moving along.
• 5:45
  SPEAKER_02: How long does it last?
• 5:46
  SPEAKER_02: How deep in the in in the spring and summer?
• 5:48
  SPEAKER_02: Last year it went to July.
• 5:50
  SPEAKER_02: Well, it will be that brilliant this year, but um it's definitely having an effect on supply.
• 5:54
  SPEAKER_02: Um near-turn supply, weights, uh, weights are coming down a little bit, kills are coming down.
• 5:59
  SPEAKER_02: Oh, there's been a few weather issues with that, but multiple packers bidding on cash hogs, that's all good.
• 6:04
  SPEAKER_02: Pork cutout, you know, it's bouncing around a little bit here this week.
• 6:07
  SPEAKER_02: The belly primal kind of but pork cutout demands, you know, in a really good spot.
• 6:11
  SPEAKER_02: Um, and and and the futures curve just continues to push higher and higher and higher, and uh margins continue to move, move up and up and up, and you know, all you know, just the pork industry's got a really solid undertone to it.
• 6:24
  SPEAKER_02: It's in a really good spot right now, but also you know, manage money uh up their long position.
• 6:29
  SPEAKER_02: Again, I don't have it in front of me, I think around 110,000 contracts or something like that, increased week over week.
• 6:34
  SPEAKER_02: I mean, you know, it's a really good opportunity to lay off some risk too, right?
• 6:38
  SPEAKER_00: It seems like, especially across all the proteins right now, they kind of have maxed long positions, whether it be hogs, cattle, feeder cattle.
• 6:45
  SPEAKER_00: Uh, this protein complex, they've built up a pretty big long position, it seems like.
• 6:49
  SPEAKER_02: It it does, it does, and and and for big reasons, but you know, things can change in a hurry, right?
• 6:54
  SPEAKER_02: And and and and whatnot.
• 6:56
  SPEAKER_02: But uh yeah, the the protein complex in general, it's you know, and honestly, not not only in the cattle and and pork comp, but the the the the poultry comp, the chicken meat comp.
• 7:05
  SPEAKER_02: I mean, chickens, chickens haven't they're having a growth here as well, too.
• 7:08
  SPEAKER_00: So they're the big benefactor, it seems like, of high beef prices lately, doesn't it?
• 7:12
  SPEAKER_02: They seem to be able to move pretty quick in supply, and uh they're really good at marketing, that is for sure.
• 7:17
  SPEAKER_00: Especially going into the Super Bowl this weekend.
• 7:19
  SPEAKER_00: Uh that seems like the the the big weekend for the chicken wings, especially.
• 7:23
  SPEAKER_02: Yeah, it is.
• 7:24
  SPEAKER_02: I suppose uh chicken wings in about every household.
• 7:27
  SPEAKER_02: You should be eating pork wings, in my opinion.
• 7:28
  SPEAKER_00: But very much so.
• 7:30
  SPEAKER_00: Uh what else can you tell us from uh just a market perspective this week?
• 7:33
  SPEAKER_00: We've seen a lot of volatility in a lot of other commodities, and uh I I'm curious what you're seeing on the hog side, Luke.
• 7:40
  SPEAKER_02: Yeah, yep, like like you know, like we kind of hit on quick.
• 7:42
  SPEAKER_02: I mean, cash uh 87, I think 88.50 maybe.
• 7:46
  SPEAKER_02: It's been really good, right?
• 7:47
  SPEAKER_02: Yeah, I think that maybe posted yesterday afternoon.
• 7:49
  SPEAKER_02: But good hog demand, multiple packers uh participating.
• 7:52
  SPEAKER_02: I I'd say, you know, the first basically the first four weeks of the year were slightly higher uh than a year ago on slaughter, and then weights started coming down, and and you know, we've had lower slaughter rates here now last week, I think, and well this week, year over year, we maybe slightly over harvested the supply.
• 8:08
  SPEAKER_02: Supply's tight, you know.
• 8:09
  SPEAKER_02: I think that's a combination of a lot of different things, but you know, supply seems to be uh you know be a uh a tailwind here right now, and you know, and like I mentioned, product demand, it's it's it's good.
• 8:20
  SPEAKER_02: I mean, you know, it was down four bucks yesterday because bellies were down 20, right?
• 8:24
  SPEAKER_02: So it's at 93, it was 97 the day before.
• 8:27
  SPEAKER_02: You know, pork demand is still hanging in you know in a really good spot.
• 8:31
  SPEAKER_02: And you know, the futures curve when you you know take a look at futures and you've got you know July futures at 111.35.
• 8:38
  SPEAKER_02: You know, I suppose you know a target on the charts would be around that 114, just shy of it area, right?
• 8:43
  SPEAKER_02: October at 92, D's, you know, even further out in the deferreds, you know, posting new contract highs here every day, close at 82.42.
• 8:51
  SPEAKER_02: Um, yeah, it's just in a really good spot.
• 8:53
  SPEAKER_02: And yes, we had some fireworks and beans.
• 8:55
  SPEAKER_02: I was actually I I was presenting yesterday and I had what I looked at the bean mark before my presentation, then after the presentation, I'm like, what happened?
• 9:03
  SPEAKER_02: Trump also said something because man, in that quick time frame, it was different.
• 9:06
  SPEAKER_00: But you know, even pull up the minute chart here, Cade.
• 9:10
  SPEAKER_00: You can see yesterday at about 9.38 a.m.
• 9:13
  SPEAKER_00: is when he put that truth post out.
• 9:15
  SPEAKER_00: And you could just tell.
• 9:16
  SPEAKER_00: I mean, it we just sky there's a right there basically between uh 9.30 and 10.
• 9:22
  SPEAKER_00: It put on about 50 cents plus uh from the move that we had earlier in the day.
• 9:27
  SPEAKER_00: So it a very, very extreme move yesterday and and a very quickery.
• 9:31
  SPEAKER_00: But meal what I mean that was obviously impacted from it and soybean oil.
• 9:37
  SPEAKER_02: And you know, tech talk a little bit about I mean these 45z credits too, right?
• 9:40
  SPEAKER_02: That's kind of some bigger news in this week, Mike.
• 9:42
  SPEAKER_00: It could be, yeah.
• 9:43
  SPEAKER_00: I think the big uh the big parts were obvious things, which uh they're not gonna be able to use feed stocks from China for the for the 45Z credits.
• 9:52
  SPEAKER_00: This isn't Q, which Q would be more along the lines of the pipeline and those types of things.
• 9:57
  SPEAKER_00: This is just moving a tax credit basically to uh to the um to the ethanol plants rather than the blenders, uh, which it was before.
• 10:06
  SPEAKER_00: So at this point, nothing new.
• 10:08
  SPEAKER_00: It still has to go through the process and get approved and everything.
• 10:12
  SPEAKER_00: Uh it's early stages, but it we're talking about it again.
• 10:15
  SPEAKER_00: We've been talking about E15 seasonally lately a lot more.
• 10:18
  SPEAKER_00: Um it seems like on the biofuel side, it's just getting a little bit more help.
• 10:22
  SPEAKER_00: And and it makes sense.
• 10:24
  SPEAKER_00: Stage of the cycle, three years ago when 45Z was first announced, corn was like seven dollars, right?
• 10:29
  SPEAKER_00: So it's just not the phase of the cycle to be talking about let's find ways to increase demand.
• 10:34
  SPEAKER_00: Now you're getting into big ending stock situations in the United States.
• 10:38
  SPEAKER_00: It makes more sense that we're gonna try to find a little bit better ways to increase uh uh you know, corn demand.
• 10:45
  SPEAKER_00: And one of the ways to do that in a very easy, consistent lever would be domestically through gas, fuel demand, just on ethanol and renewable diesel.
• 10:55
  SPEAKER_00: And uh this administration has definitely not uh a huge priority to be a little bit more about alternative energy sources, greener energy, but uh at least if the next administration or the one after it is maybe on the left a little bit more, uh you'll see more of those policies start to be relevant again.
• 11:13
  SPEAKER_00: And uh at this point, I think uh this administration does at least want to help agriculture.
• 11:19
  SPEAKER_00: And you know, the the pork side doing pretty well, cattle guys, they're really optimistic.
• 11:23
  SPEAKER_00: Like at the NCBA conference this week, they're doing really they're feeling good.
• 11:27
  SPEAKER_00: They they talked about how the atmosphere of the show was really good.
• 11:30
  SPEAKER_00: You know, the grain guys are it's not awful yet, but it's probably tone.
• 11:35
  SPEAKER_00: It's not the same tone.
• 11:36
  SPEAKER_00: So it makes sense that we're gonna talk about things like 45Z or uh you know trying to increase exports here a little bit.
• 11:44
  SPEAKER_00: But on those topics, I I do want to bring something up, which would be what you mentioned the some of the primals a little bit.
• 11:51
  SPEAKER_00: I want to talk about the ham specifically, with how how one of the male big questions we had here, if you ever have questions, guys, just email uh into us at the show is Mexico and the USMCA.
• 12:02
  SPEAKER_00: Are are we worried about that in the ham trade going forward?
• 12:05
  SPEAKER_00: And is this a tomorrow problem or is this like the next year?
• 12:08
  SPEAKER_02: Yeah, for sure.
• 12:09
  SPEAKER_02: And actually, I think you know that I I'm glad you brought that up.
• 12:12
  SPEAKER_02: And I I I kind of wanted to end this podcast with this because like the pork industry, we have tremendously good things going on.
• 12:17
  SPEAKER_02: And and and it's it's I mean bullish kind of news all over the complex, right?
• 12:22
  SPEAKER_02: But that that that I mean from a watch list from from ProEggs or from our perspective, um USMCA uh and and where we stand with Mexico, that's our biggest concern for this year.
• 12:31
  SPEAKER_02: And you know, it it's up in July, and Trump's been very, you know, uh he he wants to change the deal up, right?
• 12:37
  SPEAKER_02: And you know, this anti-dumping taste that's going on now that Mexico's filed, I mean, that's a positioning for USMCA negotiations, right?
• 12:45
  SPEAKER_02: And um, you know, yes, Mexico long term, they're in a structure, they need our hams.
• 12:50
  SPEAKER_02: Um, they you know, it will be a good market for us, but it doesn't mean they can't do some things to put some pinch points on short term, right?
• 12:56
  SPEAKER_02: And you know, you know, unfortunately, it's just you know, we've seen it in China with the soybeans and you know, sometimes food gets weaponized, if you will, as a political to as a as a as a political tactic, right?
• 13:07
  SPEAKER_02: And if if this USMCA thing goes sideways and you know, and we get you know in a spot where Mexico drops some ham demand, we've got to clear that ham elsewhere, domestically or other export markets, lower price.
• 13:20
  SPEAKER_02: So you know that and and we just saw with you know, again, it was a tweet and you know, buy the rumor sell effect and all that in the soybean complex, right?
• 13:28
  SPEAKER_02: But we we need anything as a hog producer, if Mexico comes up, you need to have ears up and be listening because it is vital.
• 13:34
  SPEAKER_02: We export 24-25% of our production, and Mexico is by far our largest export customer.
• 13:40
  SPEAKER_02: So, you know, I think all ears up on that.
• 13:43
  SPEAKER_02: You know, again, as far as these markets, uh, markets are good, right?
• 13:47
  SPEAKER_02: But we we hedge for things we can't see, we hedge to manage risk in our business.
• 13:51
  SPEAKER_02: And you know, if we hit some road bumps with Mexico, there's there's there's that there's gonna be some pain points with that.
• 13:56
  SPEAKER_02: So all eyes on that.
• 13:58
  SPEAKER_02: We're watching it.
• 13:58
  SPEAKER_02: But as we, you know, like I said, when we look at what is one of our biggest, you know, besides the obvious, and I knock on wood every time I say this foreign animal disease, African swine fever, something else that closes our borders down, that we have that constant risk.
• 14:11
  SPEAKER_02: But um, Mexico's concerning.
• 14:13
  SPEAKER_02: I I think we'll get it figured out.
• 14:14
  SPEAKER_02: Trump and Shrine Baum have have seemed to always kind of get that done through you know, through this administration so far, but uh that that's a big deal.
• 14:21
  SPEAKER_02: That's a really big deal for us, Mike.
• 14:23
  SPEAKER_00: Same on the corn side too.
• 14:24
  SPEAKER_00: Mexico, obviously, a top number one buyer of U.S.
• 14:27
  SPEAKER_00: corn.
• 14:28
  SPEAKER_00: They buy about 90% of their corn needs from the United States.
• 14:31
  SPEAKER_00: Uh, corn exports have been incredibly hot this year, so uh especially to Mexico.
• 14:37
  SPEAKER_00: People are worried a little bit about why they would be front loading.
• 14:40
  SPEAKER_00: You know, if they if they are gonna pick a fight with us, it might it might be in their interest to try to load up a little bit more.
• 14:45
  SPEAKER_00: So uh thank you for your time today.
• 14:47
  SPEAKER_00: Any final thoughts?
• 14:48
  SPEAKER_02: Yeah, hey, Minnesota Pork Congress next week.
• 14:50
  SPEAKER_02: Come see us uh in Man Cato, Minnesota.
• 14:52
  SPEAKER_02: It's a great show and uh should have even a little bit of warmer weather coming at us, good for travel and all that.
• 14:57
  SPEAKER_02: So have a great uh have a great week, everybody.
• 15:00
  SPEAKER_00: Thank you, Luke.
• 15:01
  SPEAKER_02: Bye-bye.
• 15:02
  SPEAKER_00: And thank you for tuning in today.
• 15:03
  SPEAKER_00: Before we wrap up, just a quick reminder here if you're listening on Spotify or Apple Podcasts, make sure to check us out on YouTube as well.
• 15:11
  SPEAKER_00: That's where we will post full video versions of these shows with charts and graphs and visual market breakdowns to help you follow along.
• 15:20
  SPEAKER_00: Also, Riskology coming up February 17th on YouTube.
• 15:24
  SPEAKER_00: If you're looking to deepen your understanding of how agricultural markets work, how it's managed, and why markets do what they do, please follow along on the Riskology series.
• 15:34
  SPEAKER_00: It's a great place to start.
• 15:35
  SPEAKER_00: And if you want to take it to the next step, we'll be hosting a Riskology boot camp at SDSU on February 18th and 19th.
• 15:42
  SPEAKER_00: You can register for that on professional agmarketing.com website.
• 15:46
  SPEAKER_00: Thanks again for listening.
• 15:47
  SPEAKER_00: We'll see you next time.