Sort & Cull

Wipe Your Nose and Power On

John Harrington
By  John Harrington , DTN Livestock Analyst

Instead of minding her doctor's diagnosis of pneumonia late last week by popping back in bed with a case of bottled water, Hillary Clinton unwisely decided to just wipe her nose, jump into a fresh pantsuit, and "power on."

Been there, done that (not so much the pantsuit).

I don't mean to make stoic heroes of either of us. But Candidate Clinton's excuse for not taking better care of herself seemed to have the ring of truth. We live in an extremely hectic age. While the perception is no doubt delusional, it's all too easy to see yourself as a critical player on life's swirling merry-go-round.

Who among us has not "sucked-it-up" in the name of uncompromising responsibility, fearing that if we fumble the ball because of short-term discomfort, the big game will be lost, called off, or, most tragically, be completed oblivious to our absence.

The whole work ethic is also a big part of this maddening mindset (i.e., crazy because it can be both life-stunting and absolutely necessary). As my hardworking and philosophical Dad would say whenever the soft, warm bed looked better than the cold, hash wind: "Well, the cows won't milk themselves."

Power on indeed, Hillary. Sometimes keeping your shoulder to the boulder is absolutely intoxicating, whether you're running for president, writing a column, or retooling the size of farrowing barns and finishing floors.

Pork producers are currently staring into the market equivalent of the Mayo Clinic's emergency room with deferred lean hog futures cutting deeper discounts every time they turn around. While these guys have enjoyed fairly robust health (i.e., decent profits) over the last six months or so, they're feeling more and more poorly as dressed sales relentlessly below breakevens in the low $60s.

For example, if the December lean contract can somehow manage to find the brakes and stabilize around $48.50 (its low as of this writing), late-year barrows and gilts will lose close to $30 per head. Furthermore, the board currently threatens that a high tide of red ink will crash over production country for the next three quarters.

Surely, if there ever was a time to call in sick, unplug your phone charger, and shiver-out the bearish market fever under the covers, this is it.

Of course, it ain't never that easy.

Given the long-term nature of necessary infrastructure, capital needs and biological realities, decision-making and production strategy in the world of livestock is nothing like a light switch. Just as it takes more than a few leagues of open sea to turn a cruise ship around, the long road from pig to pork is not one you can reverse on a dime.

Beyond these practical speed bumps, stressed producers in the early fall of 2016 have good reason to wonder if their general health and very age span actually requires them to muscle through the economic equivalent of walking pneumonia, working through short-term pain in order to capitalize on longer-term opportunities.

The construction of three major processing plants in 2017-2018 (i.e., Seaboard Triumph at Sioux City, Iowa; Clemens Food Group at Cold Water, Michigan; Prestage Farms in Wright County, Iowa) is crooking a bullish finger at currently troubled pork producers, encouraging them to "power on" with expansion plans in order to one day score big thanks to a major hike in slaughter capacity.

While only time will tell whether your bid for the White House or effort for greater market share was worth playing hurt, it's not difficult to understand the temptation.

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