Tomorrow’s Hogs and Pigs report from USDA will be highly interesting as it will reflect six months of post-COVID-19 impacts on the U.S. hog and pork industry. The trade is expecting a 1 percent reduction in the total U.S. hog herd and a 2 percent reduction in the breeding herd. These expectations are based on poor production margins and producers’ stated intentions to reduce farrowings this fall. WPI, however, expects an increase in U.S. hog inventories and a bearish report from USDA. Our forecast is based on the apparent backlog in market hog slaughter and better-than-expected producer profits this fall. Our models suggest the economic incentives have been for producers to expand production rather than liquidate and that...
What You Need to Know Today: President Trump claimed the ceasefire between the U.S. and Iran was over, as both sides accused one another of violating the terms of the agreement. Commercial vessels are increasingly steering clear of the Strait of Hormuz as security risks escalate following Iran...
Key Takeaways: The CME Group is launching new 90 percent Lean Beef and 50 percent Lean Beef futures and options contracts in July. There are five key factors that must be present in physical markets and futures contract specifications for futures contracts to become successful. The two l...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.