Hog Commentary: 07/28/11 – If you sell hogs, this is a must read.

Published on: 14:50PM Jul 28, 2011


Hog Commentary: 07/28/11 – If you sell hogs, this is a must read.

It has been a while since I’ve posted any commentary as I’ve taken to twitter to provide more up to the minute information.  The goal behind the twitter account is to try and produce the nation’s leading cash hog marketing network.  The purpose is to try and increase the amount of negotiated pigs on a national basis.  As an industry we allow approximately 90% or more of our nation’s pigs to be priced on formulas and other contracts that use the weighted average price as a benchmark.  The weighted average is set by negotiated pigs which are typically less than 10% of the pigs sold on any given day.

In my opinion the industry is at a serious cross road.  If the industry doesn’t do something to increase the amount of pigs that are negotiated to help set the price for formula hogs we could see the independent negotiator go away because the packers have too much control over price and movement.

Take a look at this from a negotiator that sells pigs.  It is almost like an entitlement program.  They work their butts off to try and get a good market price for their pigs on the open market and by them doing so the by-product is a higher weighted average for the other 90+% of the country to take advantage of.   This has nothing to do with intelligence or who is a better producer, it has to do with supply and demand of physical product.  Right now negotiated hogs are basically there to fill the holes that arise from smaller numbers of pigs coming in on contracted commitments.

This request isn’t to ask you to go negotiate 100% of your production by any means.  Start out by looking into the actual cash market prices on a day to day basis to see what is available compared to what you actually take home with a formula.  If you gather enough information and you are comfortable with it then try to negotiate a couple of loads a month to test the waters if you are setup to do so.

We are working to develop a cash hog network to spread cash news to those that are negotiating as well as those that are thinking about negotiating.  We need your help.  We would like to hear from you if you negotiate pigs.  You can either call my office to inform us of a cash sale or call a hotline that goes directly to a voicemail and leave a message.

The purpose of informing us of cash sales is so we can spread the highest prices received in order to help other producers negotiate their pigs and ultimately help the U.S. producer increase the number of negotiated pigs countrywide.

We use a tool called Twitter, some of you may know what it is and some may not.  Twitter is a free tool that you sign up for online that allows you to "follow" someone and anytime that someone decides to put a piece of information out to his "followers", the followers have an option to get a text message sent to their cell phone or they have the option of looking at the news online.   With most producers now having cell phones and a surprising amount that at minimum receive text messages, this is a TREMENDOUS tool to use.  If you don’t know how to setup an account ask almost any teenager and they should be able to get you going otherwise give us a call and we will help you.

Bottom-line – how it works.  If you make a cash sale you can call our hotline number             605-221-1948       and leave a message with your sale and then we will send a message to our "followers" who will then get a text message on their cell phone.  We will only send a "tweet" (a max 140 letter text msg) out if the sale price is higher than what we’ve already posted.

Our information is as follows:

Office:             1-877-212-2564      

Hog Hotline:             1-605-221-1948       (goes directly to a voicemail)

Website: www.leanhog.net

Email: [email protected]

Twitter: www.twitter.com/jeremyknutson

If you click on my twitter link above you can read the type and size of messages that get sent out to my "followers".  In order to "follow" me you NEED to have your own twitter account which is free.

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations.  The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.