Sort & Cull

The golden rule of prudent marketing goes something like this: "Hope for the best, but plan for the worst."

I'm pretty sure some variation of this old, cautionary saw helped first build the October foundation of National Pork Month many years ago. Given the strong seasonal tendency for market hog supplies to balloon through the first half of the fourth quarter, planning for the threat of inadequate demand and lower country prices seems as responsible as avoiding government shutdowns or balancing the Federal budget. (Bad examples?).

Hats off to the Pork Board for engineering such a timely and generally well-focused promotion. Few who have stumbled around the block more than once would deny that it represents a good bet. Good use of check-off dollars, boys and girls.

Well, maybe not this year.

As much as I hate to disappoint the well-versed curmudgeons and naysayers of the season, sometimes things actually work out for the best. Happily, the fall of 2015 seems to be unfolding with almost an embarrassment of good news for producers, a bullish parade long enough to suggest that "pork month" spending and hype turned out to be overkill.

Here's just a short list of why this is one October when it's good to be pork.

1) Despite excellent profits through most of 2014 and a pattern of declining feed costs, producers have demonstrated impressive discipline resisting the temptation of herd expansion. Commercial tonnage remains quite manageable and generally smaller than anticipated earlier this year.

2) No doubt benefiting in part from record beef prices, pork demand over the last several quarters has proven to be remarkably strong with both domestic and foreign buyers exceeding conventional appetites (i.e., spending above the demand curve).

3) In launching its 24/7 breakfast menu across the nation this week, McDonald's has presented the pork industry with a trophy worthy of the World Series or Superbowl. From bacon to sausage to ham, pork producers own breakfast every bit as much as Hillary owns pantsuits.

4) The recent break-through in the final negotiation of Trans-Pacific Partnership free trade agreement set the stage for explosive exporting opportunities for the hog and pork biz. The TPP would require Japan to lower its tariff on U.S. pork by 25% in just the first year.

For more from John see www.feelofthemarket.com

(CZ)

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