Pig outlook: US Lean hog futures prices languish

CME lean hog futures trading has turned sideways and choppy the past week.
calendar icon 10 September 2021
clock icon 4 minute read

While US cash hog prices typically soften during the second half of the year as market hog supplies build, it’s not uncommon to see the cash hog market firm in September. The average US national direct cash hog price firmed $1.31 Wednesday, signaling a short-term low could be in place. It’s not uncommon for the cash hog market to work higher during September before facing more pressure the final three months of the year as slaughter supplies become the heaviest.

Latest USDA and other news regarding the global pork industry

USDA Chief discusses US drought impact on meat prices

USDA Sec. Tom Vilsack said Wednesday he is concerned about the effect of drought on US meat prices that are already rising. Vilsack at the White House said that meat prices are already on the rise and could go higher due to a prolonged drought in western states. That is why USDA is expanding its help for producers in drought-stricken areas to cover feed transportation costs for livestock that rely on grazing. USDA is updating its Emergency Assistance for Livestock Honey Bees and Farm-raised fish Program (ELAP) to cover those costs for drought impacted ranchers. Vilsack said the move should provide some relief soon as ranchers make their herd management decisions for fall and winter. Producers will be able to apply for the feed transportation assistance later this month through their local Farm Service Agency offices.

“USDA is currently determining how our disaster assistance programs can best help alleviate the significant economic, physical and emotional strain agriculture producers are experiencing due to drought conditions,” said Vilsack. “The duration and intensity of current drought conditions are merciless, and the impacts of this summer’s drought will be felt by producers for months to come. Today’s announcement is to provide relief as ranchers make fall and winter herd management decisions.”

White House: Meatpacker consolidation raising grocery bills

The Biden administration is taking aim at major meat packers, saying they’ve squeezed consumers and farmers while recording record profits. In a blog post published Wednesday, three senior economic aides to President Joe Biden said consolidation in beef, pork, and poultry processing has raised prices and hurt consumers. “The meat-processors are generating record profits during the pandemic, at the expense of consumers, farmers, and ranchers,” the blog authors, including National Economic Council Director Brian Deese. “Absent this corporate consolidation, prices would be lower for consumers and fairer for farmers and ranchers.”

Price increases for those meats make up half of the rise in food prices since late 2020, they said, fueling inflation that has generated political pressure on Biden. The administration is pressing Congress to make cattle markets more transparent.

The Justice Department is investigating big meatpacking companies to determine whether they are violating antitrust laws. The probe started in the last year of the Trump administration, and the Biden administration is pushing forward, with plans to issue additional civil investigative demands, according to a person familiar with the matter.

China meat imports slow in August

China imported 758,000 MT of meat (including offal) in August. That was down 11.2% from July and 8.9% compared with August 2020. In the first eight months of this year, Chinese meat imports totaled nearly 6.7 MMT, up 1.7% versus the same period last year.

The next week’s likely high-low price trading ranges:

October lean hog futures--$85.00 to $90.00 and with a sideways bias

December soybean meal futures--$325.00 to $345.00, and with a sideways-lower bias

December corn futures--$4.85 to $5.20 and a sideways-lower bias

Latest analytical daily charts lean hog, soybean meal and corn futures

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