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Hog Talk: Ripping Into 2026 · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Hog Market Talk Podcast with professional egg marketing.
• 0:05
  SPEAKER_00: Come here to get fresh updates on what's happening week to week within the leanhog complex.
• 0:10
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:16
  SPEAKER_00: And remember to visit swineweb.com, an excellent resource for information in the pork industry, where you can also find this podcast.
• 0:25
  SPEAKER_00: This is your host, Mike Miner.
• 0:26
  SPEAKER_00: Let's cross.
• 0:27
  SPEAKER_00: Today is December 31st.
• 0:29
  SPEAKER_00: We have the last trading day of 2025 upon us.
• 0:33
  SPEAKER_00: Luke, how's it going today?
• 0:35
  SPEAKER_01: It is going well, Mike.
• 0:36
  SPEAKER_01: How are you doing today?
• 0:37
  SPEAKER_00: Not too bad.
• 0:38
  SPEAKER_00: Well, we've got a few fun things to kind of chat about today.
• 0:41
  SPEAKER_00: Uh do a just a slight recap here.
• 0:43
  SPEAKER_00: I want to talk on the demand side, uh, more uh even on the beef than the pork side, because that's actually holding up pretty well in light of it.
• 0:51
  SPEAKER_00: And uh just get your kind of goals for 25 going out forward or going out to 26, kind of what you're looking at going into the new year here.
• 0:59
  SPEAKER_00: So where do you want to start, Luke?
• 1:01
  SPEAKER_01: Yeah, Mike.
• 1:02
  SPEAKER_01: I mean, we had uh you know, 25 was a was by and large, uh there's some separations on your health status, of course, because we we you know there's there's we we had good markets, good demand, supply's been uh been favorable, we've been disciplined on sal growth, right, Mike?
• 1:18
  SPEAKER_01: But you know, as you look kind of forward, I mean obviously there's some great margins out on the board, so you can manage the risk.
• 1:25
  SPEAKER_01: Uh obviously we're big fans of that in this shop, right?
• 1:28
  SPEAKER_01: But one of the biggest inferentiers, obviously, export risk, you know, but export's been good.
• 1:33
  SPEAKER_01: Um it's it's been reasonable, especially considering you know, we went through some pretty hefty tariffs, which largely were toothless, at least to our biggest customers, right?
• 1:42
  SPEAKER_01: Did some damage in China, but Mexico kind of we came out of that relatively unscathed, which is great for the pork industry, right?
• 1:49
  SPEAKER_01: But the you know, one of the biggest health, you know, it's challenges is health, right?
• 1:53
  SPEAKER_01: Um, on a broader sense, an export closing, African swine fever, right?
• 1:57
  SPEAKER_01: And and Spain is fighting that right now.
• 1:59
  SPEAKER_01: And knock on wood, every time I do it, my knuckles get sore, but you know, it's not coming here, right?
• 2:04
  SPEAKER_01: We always have that.
• 2:05
  SPEAKER_01: But PERS, PDV, you know, those are challenges that we're still fighting out here in the industry.
• 2:11
  SPEAKER_01: And here these last few weeks, really since kind of late November, December, there's been quite a bit of health things going around.
• 2:18
  SPEAKER_01: And that's you're seeing that in the deferred futures, right?
• 2:20
  SPEAKER_01: We wean pig market super tight, uh, super expensive, top end 85, 86 bucks, uh, hard to find inventory.
• 2:28
  SPEAKER_01: Uh, you look at uh um you look at uh where am I going with this?
• 2:34
  SPEAKER_01: You look at uh availability, um, you know, that that's not there, and so uh Spain ASF and new contract ties July and August.
• 2:43
  SPEAKER_01: Now you come back to the front end, you know, we've had narrower or better than normal basis.
• 2:47
  SPEAKER_01: We've had quite a bit of supply.
• 2:49
  SPEAKER_01: We had some big 2-7 kills, Mike, here the end of the year.
• 2:53
  SPEAKER_01: You know, and the hog and pig report came out last week, and we're not gonna rehash that, right?
• 2:56
  SPEAKER_01: But it showed more pigs, kind of made sense.
• 2:58
  SPEAKER_01: But something that was kind of exciting here midweek, Mike, is you know, next week we're buying for a full week, right?
• 3:04
  SPEAKER_01: And we're gonna run.
• 3:05
  SPEAKER_01: Uh, product, I mean, it's it's not at 99 or 100 anymore, but it's mid to low 90s, 94 wherever it settles today.
• 3:11
  SPEAKER_01: It's it's good, right?
• 3:13
  SPEAKER_01: Uh, you know, and with these bigger pigs, weights have been high, but we've got really good revenue and we've got pretty cheap corn and meal.
• 3:20
  SPEAKER_01: It makes sense to make these pigs big, but we came out and you're not really seeing it in the USDA prints because Packers still there's just no volume in the cash hog market yet.
• 3:29
  SPEAKER_01: But this this it was a quiet week, if you will, but those are in the game.
• 3:33
  SPEAKER_01: There was needs for cash hogs this week.
• 3:35
  SPEAKER_01: Um, we actually had the phone ring and Packers calling, looking for some pigs, willing to add contract loads, right?
• 3:41
  SPEAKER_00: And that's a weird time of the year for them.
• 3:43
  SPEAKER_01: It's it's it's it's a unique time of the year, right?
• 3:45
  SPEAKER_01: But it also it's it it and it makes some sense.
• 3:47
  SPEAKER_01: I mean, when we were killing these two seven type runs, I mean, we were hopeful maybe we were slightly overkilling a little bit.
• 3:53
  SPEAKER_01: Probably overdid it.
• 3:54
  SPEAKER_01: And and maybe a little bit.
• 3:55
  SPEAKER_01: So having Packers come out this week and need to get, you know, and they got after it pretty good, Mike.
• 3:59
  SPEAKER_01: There's some pretty exciting negotiations in that spot space today.
• 4:03
  SPEAKER_01: And and um, that that's a great sign.
• 4:06
  SPEAKER_01: You know, this has been all about a demand market, it still is a demand market.
• 4:12
  SPEAKER_01: Here, just very recently, there's been just a little chinks in the demand armor.
• 4:16
  SPEAKER_01: You you mentioned that.
• 4:17
  SPEAKER_01: Uh hams, you know, they got weak last week.
• 4:19
  SPEAKER_01: We heard that was gonna happen.
• 4:21
  SPEAKER_00: What did you call that?
• 4:22
  SPEAKER_00: The hamageddon?
• 4:23
  SPEAKER_01: Well, hamalanche, and that's that that wasn't my term.
• 4:27
  SPEAKER_01: I took it from somebody else, but they said last Tuesday hams were gonna fall like an avalanche, and they did.
• 4:32
  SPEAKER_01: They lost like 13 bucks week to week, right?
• 4:34
  SPEAKER_01: Um, plenty of plenty of product out there, plenty of hams being offered.
• 4:38
  SPEAKER_01: Uh, but seasonally, too.
• 4:39
  SPEAKER_01: If you look at a chart, I mean we're through the Christmas demand, right?
• 4:42
  SPEAKER_01: We've got great Mexico business yet, but the next big like holiday demand's Easter.
• 4:47
  SPEAKER_01: So it's not untypical for hams to drop a little bit now and trade a little tough to sideways to lower here the first quarter of the year, right?
• 4:54
  SPEAKER_01: And so that made sense.
• 4:56
  SPEAKER_01: Bellies have been volatile this week, on 20, off 20, right?
• 4:59
  SPEAKER_01: I mean, a little bit of chop, loins are feeling a little sticky, uh, trim's been a little soft.
• 5:05
  SPEAKER_01: Uh butts and ribs have still been strong, right?
• 5:08
  SPEAKER_01: So, anyway, from 99 bucks, it's hard to go higher, especially with with seasonally, you know, higher production runs.
• 5:15
  SPEAKER_01: So, so cutout was a little weaker.
• 5:16
  SPEAKER_01: Uh a little bit, it's been a good guy, bad guy.
• 5:18
  SPEAKER_01: I mean, high beef prices have been, you know, but pork's been a benefactor of that.
• 5:23
  SPEAKER_01: Uh, choice box beef, though, since what November, it's dropped about 30 bucks.
• 5:27
  SPEAKER_01: Um, still a very high value, still very expensive.
• 5:31
  SPEAKER_01: But that's kind of in the ribs.
• 5:33
  SPEAKER_01: I think ribs since then, they've dropped what, like 120, right?
• 5:36
  SPEAKER_01: Those higher end cuts, right?
• 5:37
  SPEAKER_01: And so we're seeing a little softness on the beef side, still high, still a big spread.
• 5:42
  SPEAKER_01: Um, and so when you look at demand, this has been all about demand.
• 5:46
  SPEAKER_01: Demand even at 90 is still a really good number historically, right?
• 5:49
  SPEAKER_01: So demand's good, a little weaker, but kind of makes sense time of year.
• 5:53
  SPEAKER_01: We haven't had a supply story as of the last, well, really, uh month or so.
• 5:57
  SPEAKER_01: We've had more numbers than expected.
• 5:59
  SPEAKER_01: And I'm not gonna come here and say we got like a bullish supply story, but there have been some pretty significant health breaks.
• 6:05
  SPEAKER_01: Wean pig market is very tied and very expensive.
• 6:08
  SPEAKER_01: That bodes well for summer.
• 6:09
  SPEAKER_01: That's why summers made new contract ties.
• 6:12
  SPEAKER_01: I think there's more to go there, right?
• 6:14
  SPEAKER_01: And then, you know, I was kind of in the camp that we were gonna be fighting through some bigger numbers and we still may here in Q1, but producers are pretty current.
• 6:22
  SPEAKER_01: Even though these Packers needed some pigs, that was kind of hard to find them, right?
• 6:26
  SPEAKER_01: So maybe we're not in too bad a shape there.
• 6:28
  SPEAKER_01: Maybe we'll make it through.
• 6:30
  SPEAKER_01: And if if we could get a supply story, if we could start to get a cash market, then this thing get really fun, right?
• 6:36
  SPEAKER_01: But you know, all in all, feel better week to, you know, demand a little bit off, but still really good.
• 6:42
  SPEAKER_01: Supply feeling a little better week to week, you know, recapping in 25.
• 6:46
  SPEAKER_01: 25 was a was a very good year.
• 6:49
  SPEAKER_01: Uh 26 looking forward, forward curve is very good, especially if your system's healthy.
• 6:54
  SPEAKER_01: It's really, really good, right?
• 6:55
  SPEAKER_01: And so we're super excited about moving forward.
• 6:59
  SPEAKER_01: It's gonna be, you know, 25 had its own set of unique difficulties.
• 7:03
  SPEAKER_01: Uh space is very tight, it's still very expensive to construct new facilities.
• 7:08
  SPEAKER_01: Well, interest is a little softer, cost of money is still expensive.
• 7:12
  SPEAKER_01: So new barns don't cash flow.
• 7:13
  SPEAKER_01: We haven't built any for four years.
• 7:15
  SPEAKER_01: It's gonna be tough to get them built.
• 7:16
  SPEAKER_01: So we're in an interesting spot in the industry there.
• 7:19
  SPEAKER_01: We've got a lot of you know, 15, 20, 25-year-old barns, still good barns, but they need one, they need some money put into them, right?
• 7:26
  SPEAKER_00: Because they'll probably do that rather than immediately going out and building a new barn, for example, too.
• 7:31
  SPEAKER_01: Absolutely.
• 7:32
  SPEAKER_01: They'll put some money in them.
• 7:33
  SPEAKER_01: It makes more sense to do it.
• 7:34
  SPEAKER_01: But we also in 25, and that's what a lot of our customers, that's what a lot of us as pork boosters are having to work through.
• 7:39
  SPEAKER_01: It's it's finding who's gonna own that space, okay?
• 7:42
  SPEAKER_01: And so, and I'm gonna go just a little wider and deeper there, is there's a lot of back in the day, you know, 20, 25 years ago, a lot of guys come back to the farm or a lot of your I mean the hog the hog barn was a it worked great.
• 7:55
  SPEAKER_01: Yeah, it was a great way to augment farm income.
• 7:57
  SPEAKER_01: Row crop, I I know we have a little lower prices, Mike, and I know you're a row crop guy, right?
• 8:02
  SPEAKER_01: So, you know, but but row cropping's been pretty good business, and there's some securities around it.
• 8:06
  SPEAKER_01: And so, my case in point, it's it's labor.
• 8:09
  SPEAKER_01: Labor's a challenge for our industry.
• 8:11
  SPEAKER_01: We have a lot of guys out there in their 60s or 65s that own these barns.
• 8:15
  SPEAKER_01: They've got kids back, but they'd rather farm John Deere Green than do hog chores, right?
• 8:19
  SPEAKER_01: Yep.
• 8:20
  SPEAKER_01: You got these barns, nobody's building new, it doesn't work as good for the new kid to build new.
• 8:24
  SPEAKER_01: We can remodel old, which we're gonna need to because the industry's short on space.
• 8:28
  SPEAKER_01: Who's gonna own these barns, right?
• 8:30
  SPEAKER_01: And so having a good strategy around just how we're gonna keep this finishing space going, who's gonna own it?
• 8:36
  SPEAKER_01: Is the next generation gonna own them?
• 8:38
  SPEAKER_01: Are more pork producers gonna own barns, right?
• 8:40
  SPEAKER_01: I think that's one outcome, right?
• 8:42
  SPEAKER_01: So finishing space in 26, a big deal.
• 8:44
  SPEAKER_01: Health status, where are your sales positioned?
• 8:47
  SPEAKER_01: Are they positioned in good, biosecure, remote facility uh spaces, or are they in you know, hog dense areas?
• 8:54
  SPEAKER_01: And you know, if you're fighting PERS and PEDV, it takes, I mean, it's 20 bucks gone out of your bottom line, and that's probably on the low end of the number, Mike.
• 9:01
  SPEAKER_01: So, you know, what's your health status?
• 9:03
  SPEAKER_01: So I look at 26, the market is giving us some great margin opportunities, so we can handle the hedging part, right?
• 9:09
  SPEAKER_01: Health status, how are you positioned?
• 9:11
  SPEAKER_01: What's your long-term plan on your sows?
• 9:14
  SPEAKER_01: Those decisions are going through a lot of our customers' minds right now.
• 9:17
  SPEAKER_01: Um, packing space, you know, still uh we've been disciplined on supply.
• 9:22
  SPEAKER_01: Hog and pig said we have about 1% less sows.
• 9:25
  SPEAKER_01: Give or take, we haven't expanded the sow herd yet.
• 9:27
  SPEAKER_01: I do think there's going to be some new sows coming in 26, fair and 27.
• 9:31
  SPEAKER_01: Makes sense, but it makes sense at will, right?
• 9:33
  SPEAKER_01: And all that stuff, right?
• 9:34
  SPEAKER_01: But you know, focus on those things and heck, we're super jacked up about what not just 26, but 27, a decade, two decades go forward.
• 9:43
  SPEAKER_01: Um, it's just it's it's it's it's it's it's a different game than it used to be, but it's uh it takes a different set of skills, a lot of things to manage.
• 9:51
  SPEAKER_01: But uh the pork industry is in a good spot.
• 9:54
  SPEAKER_01: We needed it.
• 9:54
  SPEAKER_01: 23 was a really bad year in the pork industry.
• 9:58
  SPEAKER_01: We could not get revenue high enough to offset the costs.
• 10:01
  SPEAKER_01: 24 maybe did okay the second half of it, but 25 turned out to be a really good year, especially if you're healthy.
• 10:07
  SPEAKER_01: And 26 really looks extremely promising here moving forward, Mike.
• 10:11
  SPEAKER_00: Well, a couple things I've been keeping my eye on this week.
• 10:14
  SPEAKER_00: We got close to filling that gap on February, for example, left back in the middle of October.
• 10:19
  SPEAKER_00: Didn't quite get her accomplished, so I've been keeping an eye on that.
• 10:23
  SPEAKER_00: Some of the summer months almost up to their highest levels that we've traded there, keeping an eye on that.
• 10:28
  SPEAKER_00: Uh obviously box beef kind of tailing off here, watching I mean, the hog cutout, we've been bouncing all around.
• 10:34
  SPEAKER_00: I mean, with the with the weird holiday here and low 90s, high nineties, uh, all in between.
• 10:40
  SPEAKER_00: So uh been trying to get a grasp on that.
• 10:42
  SPEAKER_00: And then just technicals we've been overbought for a little bit of a time now on these uh hog futures.
• 10:46
  SPEAKER_00: So uh a few things I've been keeping an eye on.
• 10:49
  SPEAKER_00: But I tried to support the demand side of the category over this last weekend we had Christmas, and I think you'll find this interesting because if you go a lot of places now, it's like two bucks for a ham pound, something like that, right?
• 11:01
  SPEAKER_00: We ate a honey-baked ham from the honey-baked ham company in Sioux Falls, and it was twelve dollars.
• 11:05
  SPEAKER_00: We paid$120 for that ham.
• 11:08
  SPEAKER_00: And it was the best ham.
• 11:09
  SPEAKER_00: It was worth it, right?
• 11:10
  SPEAKER_00: It was worth it.
• 11:11
  SPEAKER_00: It was delicious, but man, that was some sticker shock for a guy.
• 11:14
  SPEAKER_00: I'll tell you what, that was a a little bit niche for us at least, but uh, I thought that was interesting.
• 11:19
  SPEAKER_01: You're you're you're coming to the good side, Mike.
• 11:21
  SPEAKER_01: And you know, that's something just just per capita, right?
• 11:23
  SPEAKER_01: So chicken per capita forecasted for 26.
• 11:26
  SPEAKER_01: USDA is a hundred and is it 115 pounds or 118 pounds?
• 11:30
  SPEAKER_01: It's a lot.
• 11:31
  SPEAKER_01: Yeah, I'm no work.
• 11:32
  SPEAKER_00: Double what other meat categories are.
• 11:33
  SPEAKER_01: I'm like, I maybe eat 20 pounds at most because I have to, right?
• 11:36
  SPEAKER_01: I mean shameful.
• 11:37
  SPEAKER_01: But pork's actually forecasted slightly lower, like around 40, 49, 48.
• 11:41
  SPEAKER_01: We you know, it's flat.
• 11:43
  SPEAKER_01: Uh and beef is what a couple, is it 56, down from 58, just on high prices, right?
• 11:48
  SPEAKER_01: So um, but proteins in, proteins good.
• 11:52
  SPEAKER_01: Uh the chicken industry, I hate to say it, they have an awesome opportunity to expand share, and they're gonna do it.
• 11:57
  SPEAKER_01: But the pork industry does too.
• 11:58
  SPEAKER_01: We just gotta, you know, that's the other thing, focus on demand products like that ham experience you just had.
• 12:03
  SPEAKER_01: How do I replicate that over more people?
• 12:06
  SPEAKER_01: How do we get people in New York and LA and Chicago and Philly doing that, right?
• 12:10
  SPEAKER_01: So, so good opportunities, and and yeah, it is uh ham, uh not just ham, but just pork.
• 12:16
  SPEAKER_01: I mean, I love my beef, right?
• 12:18
  SPEAKER_01: You know, but you got steaks and you got hamburger, right?
• 12:21
  SPEAKER_01: I mean, pork, we got shoulders, butts, ribs, we got so much versatility, so many awesome ways to cut that.
• 12:26
  SPEAKER_01: Egg roll in a bowl, pork fajitas, pork tacos.
• 12:29
  SPEAKER_01: Yeah, we just got to continue to innovate on that front.
• 12:31
  SPEAKER_01: So I I'll get off my soapbox here because I could talk another 30 minutes about demand, right?
• 12:36
  SPEAKER_01: But uh, some exciting stuff, and we appreciate everybody we've worked with, not only customers, for sure customers, but allied industry, uh, partners and friends in the industry for a great 25.
• 12:48
  SPEAKER_01: And then we're so excited about 26 and beyond.
• 12:51
  SPEAKER_01: Wish everybody a happy new year tonight, and we'll uh we'll talk to you all in the new year.
• 12:56
  SPEAKER_00: Thank you for your time and thank you for 2025.