ANALYSIS - Steve Meyer, vice president of pork analysis with Express Markets Inc. Analytics, shared an outlook for the US pork industry on the opening day of World Pork Expo in Des Moines, Iowa, USA.
Meyer first addressed the weakening of prices, noting that West Coast port issues were the "first domino that fell" which backed product up and put domestic buyers of pork in an advantageous position.
"As prices began to fall at the wholesale level and the producer level there was a very strong incentive to speed up marketings - if you know they are going to be worth less next week then you want to ship them this week. So that pushed hog numbers higher during the first quarter of the year," Meyers said.
"In addition, we had the added pressure of more weaned pigs than what we expected to have over the winter because of a very mild, especially by comparison to year-ago, season for PEDv," Meyers said. "We know that death losses were not zero, but they weren't very far off."
Every factor was really negative on the supply side for hogs and on the export demand side, and it pushed prices down lower than expected.
Key to the March Hogs and Pigs Report was, that in spite of the larger supplies, Meyers hoped to start to see some turn-around on the demand side, and that has shown to be true.
"The market has rallied up to the low to mid-$80s and the futures have hit in the range of $84 to $85 in the summer," he said. "The opportunities for producers have gone from back in March, the futures market had losses of $6 per head, and now it's got profits of approximately $10 per head for this year."
World Pork Expo, hosted by the National Pork Producer's Council, runs through Friday, June 5 and is held at the Iowa State Fairgrounds.
Top image via Shutterstock