December 26, 2024 • 18 mins
In this episode, we explore strategies to bolster the pork industry's resilience.
Christine McCracken, Senior Animal Protein Analyst at Rabobank, graces Feedstuffs Pork Nation with her expertise on the state of the pork industry. Curious about the path to recovery and what lies ahead in 2025 for pork producers? We're unpacking the improving financial health and potential for more robust margins, despite looming challenges like political uncertainties, tariffs, and changing immigration policies.
Discover why maintaining solid trade relationships with key partners such as Mexico and Canada is more crucial than ever. We also tackle how the industry is innovatively addressing labor shortages through automation and improved workforce management.
We also delve into critical economic concerns, including the national debt's effect on the US credit rating and its potential ramifications for agriculture. While sovereign debt issues linger, we discuss the importance of staying informed and engaging with lenders to mitigate risks. With only minor interest rate adjustments anticipated, some stability is expected.
As we close the year, Christine emphasizes the critical need for biosecurity and community support within the industry. Risk management takes center stage as pork producers are encouraged to partner with advisors to navigate shifting market conditions and capitalize on emerging opportunities.
Feedstuffs Pork Nation is brought to you by Alltech. Alltech delivers smarter, more sustainable solutions for agriculture through a diverse portfolio of products and services. Contact the Alltech Pork Team or visit go.alltech.com/swine-research to learn more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Sarah Muirhead / Feedst (00:07):
Welcome to Feedstuff's Pork Nation,
where we dig deep and get to theheart of the issues affecting
the pork industry.
Your hosts for this episode areMark Hulsebus of Alltech and
myself, sarah Muirhead.
Joining us to talk about thestate of the pork industry from
a financial, profitability andpolicy perspective is Christine
(00:33):
McCracken, senior Animal ProteinAnalyst with Rabobank.
Feast Us Pork Nation is broughtto you by Alltech.
Alltech delivers smarter, moresustainable solutions for
agriculture through a diverseportfolio of products and
services.
Contact the Alltech Pork teamor visit goalltechcom backslash
swine hyphen research to learnmore.
Mark Hulsebus / Alltech (00:56):
All right.
Well, thank you for everyonefor joining us for the final
episode of Pork Nation podcastfor 2024.
We are thrilled and I do meanthat thrilled to have Christine
McCracken joining us today fromRabobank.
Christine and I have known eachother for quite a few years and
we're going to have a quickdiscussion about kind of the
state of the industry, maybewhat we could expect in 2025
(01:21):
from her crystal ball in thefinancing industry and anything
else that comes up that we wantto make sure we want to make the
audience aware of.
So, christine, welcome to thepodcast.
Christine McCracken / Rabob (01:34):
Hey , thanks, mark, it's nice to be
with you.
Mark Hulsebus / Allt (01:37):
Appreciate you joining us very much, so I
think one of the things that atleast pieces of the industry are
wondering about today is youknow, we went through a period
of 18 to 24 months.
That was as tough as I canremember going back to 98, right
, and I know you'd probably bein the same boat and now we've
(01:58):
had a series of pretty solidlyblack months for a period of
time here six, eight months,something like that, depending
on who you are From yourperspective.
What's the financial positionof the industry today, as we
kind of close out 24 and headinto 25?
Christine McCracken / Rabo (02:17):
Well , it's definitely headed in the
right direction.
You know, as you mentioned,it's been a rough go.
I think it really variesdepending on your operation.
The good news is that we cansee a lot of black here in the
months ahead and that's anawfully nice position relative
to, maybe, where we would havebeen even a year ago.
Lot that can happen, but I'mpretty optimistic for next year.
(02:47):
I think balance sheets stillhave a ways to go.
I mean, you know that's apretty deep hole that we dug for
the industry, as you mentioned,but you know, the market's
really giving the industry agood opportunity to lay off some
of that risk and I think youknow, as I look at 2025, it
looks like a nice year ofhealing and some really nice
(03:08):
margins for the industry as wehead here over the next several
months, Depending on whathappens.
You know was some of thepolitical wins, as they were,
that could, you know, come inand disrupt things.
Mark Hulsebus / Alltech (03:22):
Yeah, we're going to talk about that.
Sarah Muirhead / Feedstu (03:24):
Should we talk about that?
Let's talk about that.
Mark Hulsebus / Allte (03:27):
Everybody wants to know.
Sarah, go ahead Awesome.
Sarah Muirhead / Feedstuffs (03:31):
Oh, I was just going to say what do
you see coming with the newadministration?
And from a policy standpoint,we can slice and dice this so
many ways.
And we talk tariffs, we talkimmigration, you know all kinds
of things.
So what is what's number one onyour radar screen, christine?
Christine McCracken / Rabo (03:48):
Well , there's so many things.
You know, I think immediately,as we head into January here,
it's really this port strike andhow much of an impact that
could have on our exports.
But longer term, with the newadministration, it's clearly
tariffs and immigration.
You hit on it, you know it'svery similar to what we saw in
(04:09):
the last go around.
I think that there's been somea lot of things talked about,
but nothing certain and that'skind of where we are heading
into this year.
There's a lot of uncertaintyand that, you know, from a risk
perspective, as we think aboutit as analysts, it's obviously
something that could happen andwe have to be, you know, work
through those scenarios.
(04:29):
I would say that it's unlikelythat all of the things come to
fruition.
You know it's more likely thatwe get, you know, a negotiation
and hopefully, you know, as wehead into 2025, you think about
tariffs and the two big marketsthat stand out for me are Canada
(04:49):
and Mexico, especially Mexico.
They they make up, you knowwhat 30 percent of our exports
plus, minus and exports are, youknow, obviously a significant
driver of value for our porkindustry.
So, as I think about it, it'sreally Mexico.
How closely can the newadministration work with Mexico.
(05:13):
Can they come to terms?
That stands out to me as thebiggest risk, but one that also
there's some room to negotiateand hopefully we can come to
terms.
The other big one, though, isimmigration and some potential
action on deportations.
(05:35):
It seems like that's a movingkind of discussion as well.
Obviously, there's some give andtake, and we don't know how
that might end up, but what wedo know from the first Trump
administration is that they'reserious and they obviously
wanted to look at those things,and that could create some
(05:56):
disruption in the industry.
The good news is that we'velearned a lot about how we need
to address our labor force.
We've automated in some cases,we're looking at some new
technologies that can take someof that variable labor out, but
we're also working closely withour workers and trying to
(06:18):
understand their needs and begood employers.
So I think there's been a lotof learning over the last
several years that I think willhopefully help us through a
fairly disruptive period for theindustry.
In theory, you know nothing,certain as I think, about the
potential for disruption in thecoming year, but you know, I
(06:43):
think it's also important torealize we have the renewal of
USMCA at year end and that'scoming.
So all of this is part of alonger term kind of discussion
and I don't think anything willhappen necessarily overnight,
but it highlights how importantthose markets have become and
how we really need to work toensure they stay open.
(07:06):
So it is a critical industryissue.
Mark Hulsebus / Alltech (07:11):
One of the things I vehemently agree
with you on, christine, is theissue of Mexico being so
important to us and I'll go sofar as to say more important to
us from a pork industryperspective.
Important to us from a porkindustry perspective.
Had an opportunity to listen toValeria Moy, who's the Director
General of IMCO in Mexico City,at the Pork Action Group
(07:32):
meeting in Florida in.
November, and One of the thingsI felt like came out of that
conversation was there arequestions around just how much
Shinebomb can get done withinMexico as a government.
You guys have a veryinteresting global perspective
on those kinds of items.
(07:53):
Any thoughts on that?
Christine McCracken / Rabo (07:55):
Well , you know it's interesting.
I've been meeting with a numberof our clients in Mexico and
I'd say that they're equally asreluctant to make a guess as to
how much she can get done.
But more broadly, you knowwhere we sit.
I think there's a lot to figureout still in the new
administration in Mexico and Ithink they are working hard to
(08:20):
better understand what theissues are.
But it's unclear at this point,I think, from President
Scheinbaum or her administrationkind of what path they're going
to choose to go forward.
I think initial look is thatit's a little bit risky, you
know, a little scary.
Mark Hulsebus / Alltech (08:40):
It's a chippy conversation, I think.
Christine McCracken / Rabob (08:44):
You know, but I think they're doing
a lot.
You know we're actually talkingto them.
Our team is doing some workwith the administration to help
them better understand, kind ofsome of the key issues and I
think that you know, theindustry itself is doing a good
job trying to educate theadministration on what might
(09:05):
help ease that transition.
Sarah Muirhead / Feedstuff (09:09):
What about here domestically, we're
talking Farm Bill.
I mean, are we?
You know where are we at onthat?
What do you think is going tohappen there?
Christine McCracken / Rabo (09:18):
Well , that's a struggle to have a
firm view at this point.
I'd say that you know, likeMexico, we're trying to figure
it out and how that might look.
You know we get an extensionand hopefully get some things
worked out.
But you know, I think that it'spolitics right and there's some
(09:40):
give and take and as we look atnext year and what could kind
of evolve, I think that theadministration, the new
administration, appearssupportive of agriculture.
But agriculture is a broadbasket.
There's some give and take andI don't think we'll win on all
(10:04):
accounts, but I do think thesigns are good, that they remain
supportive of the industry andthat we're, I think, in good
position to at least voice ourconcerns and that they'll listen
.
So I think that's a goodoutlook, as good as we can have,
and I don't know in generalwhat will end up happening in
the final bill.
Mark Hulsebus / Alltech (10:25):
We've covered over the course of this
past year, Christine, quite afew actually controversial
topics Population and globaldemand.
You know there's a lot ofquestions about that for us or
in front of us as an industryand an aging demographic, not
(10:45):
only in the US but, moreseverely, around the globe.
I'm going to ask a prettypointed question on a different
topic today, and that is thenational debt.
There's a few people startingto talk about, or have a belief,
starting to talk about the factthat in certain circles, it's
(11:15):
being rumbled that a number ofthe global credit rating
agencies were waiting for us toget through this election and
maybe towards the end of 2025,we start to have a pretty
serious discussion with therating agencies about the
creditworthiness of US sovereigndebt.
Do you have any feelings aboutthat, Because there's a lot of
implications of a downgrade inthe US debt specifically to our
(11:36):
industry, right?
So any thoughts?
Christine McCracken / Rabob (11:39):
You know, I probably would leave a
lot of that discussion to oureconomists.
Yeah, I tend to keep in my lane.
I would say that it is still,you know, probably a year out
from any major moves and there'sstill a lot they can do to
address those issues.
(11:59):
Obviously, the current path isunsustainable, we all know that,
and there's still a lot theycan do to address those issues.
Obviously, the current path isunsustainable, we all know that,
and there are signs thatsomething is going to need to
change, to come up with theleast painful way.
(12:21):
But one outcome is obviously adowngrade, and that's something
that is still on the table, Isuppose, as a risk.
I'd probably put it, though,below some of these other issues
that I'm worried about.
So, you know, in the grandscheme of things, you have to
look at all of the possiblerisks.
Scheme of things, you have tolook at all of the possible
(12:45):
risks.
For me, you know, as I thinkabout it, that's probably one
discussion that everyone shouldhave with their lender to better
understand, kind of what thatmight look like for their
individual operation.
Mark Hulsebus / Alltech (12:53):
So, continuing on that thought a
little bit, the short-termversus long-term rate discussion
is inextricably woven into thatquestion of sovereign debt
rating.
In a lot of ways, the bondmarket's starting to tell us one
thing versus the short-termcapital markets.
(13:15):
What knowledge would you imparton our audience relative to
what the bond market is sayingversus short-term rates?
Christine McCracken / Rabob (13:24):
And I probably, again, I'm not the
best person to ask on thisspecifically.
I would only say that that'syeah.
I'll leave it for someone elseto discuss on this fantastic
podcast.
Mark Hulsebus / Alltech (13:42):
So we may take you up on that,
Christine.
Christine McCracken / Raboban (13:45):
I might need to I know a guy.
Mark Hulsebus / Alltech (13:48):
I bet you do.
I bet you do so with that inmind.
Short-term rates.
Any thoughts there over thenext six to 12 months?
Christine McCracken / Rabob (14:03):
I'm probably not.
I mean we are our team is has ahouse view that we'll see a
little bit more, a little moremoderation here over the next
couple of meetings, butgenerally not looking for much
more.
You know, this is really kindof it.
(14:25):
You know, I think they'relooking for another 25 BIP hit,
but that's it, and so you know.
I think there were some viewsearlier in the year that from
other banks that would continueto see cuts.
Our house view has neverexpected that.
So at this point I'd say maybeanother 25 or 50, but that's it.
Mark Hulsebus / Alltech (14:50):
I think that's in a general agreement,
I think, with a lot ofagricultural lending
organizations right now.
You're not going to miss it bycontrolling your interest rate
at this point right, it's notgoing to zero, it's not even
going at this point.
Right, it's not going to zero,it's not even going down.
Another point, right.
Christine McCracken / Raboba (15:12):
No , that's not the current view.
No.
Mark Hulsebus / Alltech (15:14):
Yeah, yeah, any other watchouts for
the industry as a whole thatyou'd leave with the group here
on this final episode of thepodcast this month, you know, I
think maybe we can all catch ourbreath the group here on this
final episode of the podcastthis month, this month, you know
, I think maybe we can all catchour breath.
Christine McCracken / Rabob (15:36):
You know, after an inflection, you
know a year of inflection, andand we're which we're coming out
of.
Finally, I think we all need tostay focused on on biosecurity,
but I can never have a talkwithout, you know, focusing on
that.
There's some producers outthere that are struggling in
other areas.
I'd say that we need to all bemindful of our neighbors and
(15:58):
friends and make sure thatthey're in good shape.
This is a good time of year todo that and, and I think that
you know, maybe we can enjoy2025 without too much pain.
Um, that's my hope for the newyear and I hope, um, that we can
get to that uh in in a safe wayyeah, very, very good.
Mark Hulsebus / Alltech (16:21):
I couldn't agree more with that
last comment.
Um, certainly, I think as anindustry, we've we've all
experienced a reprieve from acouple of really tough years,
but not everybody is as faralong in that recovery as others
.
So important to remember to bemindful of all of us as an
industry and make sure we'retaking care of each other.
So, sarah, any final commentsbefore we part ways for today.
Sarah Muirhead / Feedstuffs (16:45):
No, I just would love to know what
pork producers can do to makethe most out of these market
conditions that are ahead.
You mentioned biosecurity.
Is there anything else?
They really should be focusedon Watching out for everyone in
the industry, but any practicesor things that they should be
thinking about at this point?
Risk management risk management, risk management.
Christine McCracken / Raboban (17:08):
I think working with your advisor
to make sure that you takeadvantage of markets when they
do give you opportunities isalways critical.
There's a number of companiesout there that are able to help
you through that process and,and I think you know, a lot of
producers are great and have hada great education in risk
(17:36):
management.
So now's the time right.
Things are a little better.
It doesn't mean you have totake your foot off the pedal.
You really need to.
You know, look at all youroptions, and not just those
options, but consider all theoptions in terms of, you know,
taking some of that risk out ofthe operation is a nice way of
(18:00):
thinking about the year ahead.
Sarah Muirhead / Feedstuff (18:03):
Good way to be prepared, yeah.
Mark Hulsebus / Alltech (18:05):
Very good, christine.
Thanks again for joining us forthis episode of Pork Nation
Podcast.
We sure appreciate it.
We're going to have you backand maybe dig deeper into that
sovereign debt issue, along witha guest from Raybo at some
point.
In the meanwhile, happyholidays, have a great New
Year's.
We look forward to catching upwith you again in the near
(18:28):
future.
For all of us at Pork NationPodcast, thanks for a wonderful
2024.
We appreciate everybody'ssupport and look forward to more
of the same in 25.
Welcome to Feedstuff's Pork Nation,
where we dig deep and get to theheart of the issues affecting
the pork industry.
Your hosts for this episode areMark Hulsebus of Alltech and
myself, sarah Muirhead.
Joining us to talk about thestate of the pork industry from
a financial, profitability andpolicy perspective is Christine
(00:33):
McCracken, senior Animal ProteinAnalyst with Rabobank.
Feast Us Pork Nation is broughtto you by Alltech.
Alltech delivers smarter, moresustainable solutions for
agriculture through a diverseportfolio of products and
services.
Contact the Alltech Pork teamor visit goalltechcom backslash
swine hyphen research to learnmore.
Mark Hulsebus / Alltech (00:56):
All right.
Well, thank you for everyonefor joining us for the final
episode of Pork Nation podcastfor 2024.
We are thrilled and I do meanthat thrilled to have Christine
McCracken joining us today fromRabobank.
Christine and I have known eachother for quite a few years and
we're going to have a quickdiscussion about kind of the
state of the industry, maybewhat we could expect in 2025
(01:21):
from her crystal ball in thefinancing industry and anything
else that comes up that we wantto make sure we want to make the
audience aware of.
So, christine, welcome to thepodcast.
Christine McCracken / Rabob (01:34):
Hey , thanks, mark, it's nice to be
with you.
Mark Hulsebus / Allt (01:37):
Appreciate you joining us very much, so I
think one of the things that atleast pieces of the industry are
wondering about today is youknow, we went through a period
of 18 to 24 months.
That was as tough as I canremember going back to 98, right
, and I know you'd probably bein the same boat and now we've
(01:58):
had a series of pretty solidlyblack months for a period of
time here six, eight months,something like that, depending
on who you are From yourperspective.
What's the financial positionof the industry today, as we
kind of close out 24 and headinto 25?
Christine McCracken / Rabo (02:17):
Well , it's definitely headed in the
right direction.
You know, as you mentioned,it's been a rough go.
I think it really variesdepending on your operation.
The good news is that we cansee a lot of black here in the
months ahead and that's anawfully nice position relative
to, maybe, where we would havebeen even a year ago.
Lot that can happen, but I'mpretty optimistic for next year.
(02:47):
I think balance sheets stillhave a ways to go.
I mean, you know that's apretty deep hole that we dug for
the industry, as you mentioned,but you know, the market's
really giving the industry agood opportunity to lay off some
of that risk and I think youknow, as I look at 2025, it
looks like a nice year ofhealing and some really nice
(03:08):
margins for the industry as wehead here over the next several
months, Depending on whathappens.
You know was some of thepolitical wins, as they were,
that could, you know, come inand disrupt things.
Mark Hulsebus / Alltech (03:22):
Yeah, we're going to talk about that.
Sarah Muirhead / Feedstu (03:24):
Should we talk about that?
Let's talk about that.
Mark Hulsebus / Allte (03:27):
Everybody wants to know.
Sarah, go ahead Awesome.
Sarah Muirhead / Feedstuffs (03:31):
Oh, I was just going to say what do
you see coming with the newadministration?
And from a policy standpoint,we can slice and dice this so
many ways.
And we talk tariffs, we talkimmigration, you know all kinds
of things.
So what is what's number one onyour radar screen, christine?
Christine McCracken / Rabo (03:48):
Well , there's so many things.
You know, I think immediately,as we head into January here,
it's really this port strike andhow much of an impact that
could have on our exports.
But longer term, with the newadministration, it's clearly
tariffs and immigration.
You hit on it, you know it'svery similar to what we saw in
(04:09):
the last go around.
I think that there's been somea lot of things talked about,
but nothing certain and that'skind of where we are heading
into this year.
There's a lot of uncertaintyand that, you know, from a risk
perspective, as we think aboutit as analysts, it's obviously
something that could happen andwe have to be, you know, work
through those scenarios.
(04:29):
I would say that it's unlikelythat all of the things come to
fruition.
You know it's more likely thatwe get, you know, a negotiation
and hopefully, you know, as wehead into 2025, you think about
tariffs and the two big marketsthat stand out for me are Canada
(04:49):
and Mexico, especially Mexico.
They they make up, you knowwhat 30 percent of our exports
plus, minus and exports are, youknow, obviously a significant
driver of value for our porkindustry.
So, as I think about it, it'sreally Mexico.
How closely can the newadministration work with Mexico.
(05:13):
Can they come to terms?
That stands out to me as thebiggest risk, but one that also
there's some room to negotiateand hopefully we can come to
terms.
The other big one, though, isimmigration and some potential
action on deportations.
(05:35):
It seems like that's a movingkind of discussion as well.
Obviously, there's some give andtake, and we don't know how
that might end up, but what wedo know from the first Trump
administration is that they'reserious and they obviously
wanted to look at those things,and that could create some
(05:56):
disruption in the industry.
The good news is that we'velearned a lot about how we need
to address our labor force.
We've automated in some cases,we're looking at some new
technologies that can take someof that variable labor out, but
we're also working closely withour workers and trying to
(06:18):
understand their needs and begood employers.
So I think there's been a lotof learning over the last
several years that I think willhopefully help us through a
fairly disruptive period for theindustry.
In theory, you know nothing,certain as I think, about the
potential for disruption in thecoming year, but you know, I
(06:43):
think it's also important torealize we have the renewal of
USMCA at year end and that'scoming.
So all of this is part of alonger term kind of discussion
and I don't think anything willhappen necessarily overnight,
but it highlights how importantthose markets have become and
how we really need to work toensure they stay open.
(07:06):
So it is a critical industryissue.
Mark Hulsebus / Alltech (07:11):
One of the things I vehemently agree
with you on, christine, is theissue of Mexico being so
important to us and I'll go sofar as to say more important to
us from a pork industryperspective.
Important to us from a porkindustry perspective.
Had an opportunity to listen toValeria Moy, who's the Director
General of IMCO in Mexico City,at the Pork Action Group
(07:32):
meeting in Florida in.
November, and One of the thingsI felt like came out of that
conversation was there arequestions around just how much
Shinebomb can get done withinMexico as a government.
You guys have a veryinteresting global perspective
on those kinds of items.
(07:53):
Any thoughts on that?
Christine McCracken / Rabo (07:55):
Well , you know it's interesting.
I've been meeting with a numberof our clients in Mexico and
I'd say that they're equally asreluctant to make a guess as to
how much she can get done.
But more broadly, you knowwhere we sit.
I think there's a lot to figureout still in the new
administration in Mexico and Ithink they are working hard to
(08:20):
better understand what theissues are.
But it's unclear at this point,I think, from President
Scheinbaum or her administrationkind of what path they're going
to choose to go forward.
I think initial look is thatit's a little bit risky, you
know, a little scary.
Mark Hulsebus / Alltech (08:40):
It's a chippy conversation, I think.
Christine McCracken / Rabob (08:44):
You know, but I think they're doing
a lot.
You know we're actually talkingto them.
Our team is doing some workwith the administration to help
them better understand, kind ofsome of the key issues and I
think that you know, theindustry itself is doing a good
job trying to educate theadministration on what might
(09:05):
help ease that transition.
Sarah Muirhead / Feedstuff (09:09):
What about here domestically, we're
talking Farm Bill.
I mean, are we?
You know where are we at onthat?
What do you think is going tohappen there?
Christine McCracken / Rabo (09:18):
Well , that's a struggle to have a
firm view at this point.
I'd say that you know, likeMexico, we're trying to figure
it out and how that might look.
You know we get an extensionand hopefully get some things
worked out.
But you know, I think that it'spolitics right and there's some
(09:40):
give and take and as we look atnext year and what could kind
of evolve, I think that theadministration, the new
administration, appearssupportive of agriculture.
But agriculture is a broadbasket.
There's some give and take andI don't think we'll win on all
(10:04):
accounts, but I do think thesigns are good, that they remain
supportive of the industry andthat we're, I think, in good
position to at least voice ourconcerns and that they'll listen
.
So I think that's a goodoutlook, as good as we can have,
and I don't know in generalwhat will end up happening in
the final bill.
Mark Hulsebus / Alltech (10:25):
We've covered over the course of this
past year, Christine, quite afew actually controversial
topics Population and globaldemand.
You know there's a lot ofquestions about that for us or
in front of us as an industryand an aging demographic, not
(10:45):
only in the US but, moreseverely, around the globe.
I'm going to ask a prettypointed question on a different
topic today, and that is thenational debt.
There's a few people startingto talk about, or have a belief,
starting to talk about the factthat in certain circles, it's
(11:15):
being rumbled that a number ofthe global credit rating
agencies were waiting for us toget through this election and
maybe towards the end of 2025,we start to have a pretty
serious discussion with therating agencies about the
creditworthiness of US sovereigndebt.
Do you have any feelings aboutthat, Because there's a lot of
implications of a downgrade inthe US debt specifically to our
(11:36):
industry, right?
So any thoughts?
Christine McCracken / Rabob (11:39):
You know, I probably would leave a
lot of that discussion to oureconomists.
Yeah, I tend to keep in my lane.
I would say that it is still,you know, probably a year out
from any major moves and there'sstill a lot they can do to
address those issues.
(11:59):
Obviously, the current path isunsustainable, we all know that,
and there's still a lot theycan do to address those issues.
Obviously, the current path isunsustainable, we all know that,
and there are signs thatsomething is going to need to
change, to come up with theleast painful way.
(12:21):
But one outcome is obviously adowngrade, and that's something
that is still on the table, Isuppose, as a risk.
I'd probably put it, though,below some of these other issues
that I'm worried about.
So, you know, in the grandscheme of things, you have to
look at all of the possiblerisks.
Scheme of things, you have tolook at all of the possible
(12:45):
risks.
For me, you know, as I thinkabout it, that's probably one
discussion that everyone shouldhave with their lender to better
understand, kind of what thatmight look like for their
individual operation.
Mark Hulsebus / Alltech (12:53):
So, continuing on that thought a
little bit, the short-termversus long-term rate discussion
is inextricably woven into thatquestion of sovereign debt
rating.
In a lot of ways, the bondmarket's starting to tell us one
thing versus the short-termcapital markets.
(13:15):
What knowledge would you imparton our audience relative to
what the bond market is sayingversus short-term rates?
Christine McCracken / Rabob (13:24):
And I probably, again, I'm not the
best person to ask on thisspecifically.
I would only say that that'syeah.
I'll leave it for someone elseto discuss on this fantastic
podcast.
Mark Hulsebus / Alltech (13:42):
So we may take you up on that,
Christine.
Christine McCracken / Raboban (13:45):
I might need to I know a guy.
Mark Hulsebus / Alltech (13:48):
I bet you do.
I bet you do so with that inmind.
Short-term rates.
Any thoughts there over thenext six to 12 months?
Christine McCracken / Rabob (14:03):
I'm probably not.
I mean we are our team is has ahouse view that we'll see a
little bit more, a little moremoderation here over the next
couple of meetings, butgenerally not looking for much
more.
You know, this is really kindof it.
(14:25):
You know, I think they'relooking for another 25 BIP hit,
but that's it, and so you know.
I think there were some viewsearlier in the year that from
other banks that would continueto see cuts.
Our house view has neverexpected that.
So at this point I'd say maybeanother 25 or 50, but that's it.
Mark Hulsebus / Alltech (14:50):
I think that's in a general agreement,
I think, with a lot ofagricultural lending
organizations right now.
You're not going to miss it bycontrolling your interest rate
at this point right, it's notgoing to zero, it's not even
going at this point.
Right, it's not going to zero,it's not even going down.
Another point, right.
Christine McCracken / Raboba (15:12):
No , that's not the current view.
No.
Mark Hulsebus / Alltech (15:14):
Yeah, yeah, any other watchouts for
the industry as a whole thatyou'd leave with the group here
on this final episode of thepodcast this month, you know, I
think maybe we can all catch ourbreath the group here on this
final episode of the podcastthis month, this month, you know
, I think maybe we can all catchour breath.
Christine McCracken / Rabob (15:36):
You know, after an inflection, you
know a year of inflection, andand we're which we're coming out
of.
Finally, I think we all need tostay focused on on biosecurity,
but I can never have a talkwithout, you know, focusing on
that.
There's some producers outthere that are struggling in
other areas.
I'd say that we need to all bemindful of our neighbors and
(15:58):
friends and make sure thatthey're in good shape.
This is a good time of year todo that and, and I think that
you know, maybe we can enjoy2025 without too much pain.
Um, that's my hope for the newyear and I hope, um, that we can
get to that uh in in a safe wayyeah, very, very good.
Mark Hulsebus / Alltech (16:21):
I couldn't agree more with that
last comment.
Um, certainly, I think as anindustry, we've we've all
experienced a reprieve from acouple of really tough years,
but not everybody is as faralong in that recovery as others
.
So important to remember to bemindful of all of us as an
industry and make sure we'retaking care of each other.
So, sarah, any final commentsbefore we part ways for today.
Sarah Muirhead / Feedstuffs (16:45):
No, I just would love to know what
pork producers can do to makethe most out of these market
conditions that are ahead.
You mentioned biosecurity.
Is there anything else?
They really should be focusedon Watching out for everyone in
the industry, but any practicesor things that they should be
thinking about at this point?
Risk management risk management, risk management.
Christine McCracken / Raboban (17:08):
I think working with your advisor
to make sure that you takeadvantage of markets when they
do give you opportunities isalways critical.
There's a number of companiesout there that are able to help
you through that process and,and I think you know, a lot of
producers are great and have hada great education in risk
(17:36):
management.
So now's the time right.
Things are a little better.
It doesn't mean you have totake your foot off the pedal.
You really need to.
You know, look at all youroptions, and not just those
options, but consider all theoptions in terms of, you know,
taking some of that risk out ofthe operation is a nice way of
(18:00):
thinking about the year ahead.
Sarah Muirhead / Feedstuff (18:03):
Good way to be prepared, yeah.
Mark Hulsebus / Alltech (18:05):
Very good, christine.
Thanks again for joining us forthis episode of Pork Nation
Podcast.
We sure appreciate it.
We're going to have you backand maybe dig deeper into that
sovereign debt issue, along witha guest from Raybo at some
point.
In the meanwhile, happyholidays, have a great New
Year's.
We look forward to catching upwith you again in the near
(18:28):
future.
For all of us at Pork NationPodcast, thanks for a wonderful
2024.
We appreciate everybody'ssupport and look forward to more
of the same in 25.
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