High feeding margins in China are motivating Chinese pork producers to feed market hogs to heavier weights. This is impacting the market in many ways, says Arlan Suderman, chief commodities economist at INTL FCStone.
“With feeding margins around $400 a head, it gives incentive to put as much weight as practically feasible on, taking them to 20% above previous levels. That means though, that while the dead hogs don’t eat corn and don’t eat soymeal, live hogs are eating more corn and more soymeal because the efficiencies of gain decrease at those higher weights. So you have to feed more corn and more soymeal per pound of gain which is helping offset some of the lost demand from the dead hogs,” he says.