Cooler Weather Blamed for Lower Hog Prices

by 5m Editor
12 September 2011, at 11:53am

CANADA - A US based agricultural economist blames cooler weather and resulting increased growth rates for a substantial reduction in North American live hog over the past couple of weeks, writes Bruce Cochrane.

North American hog prices have declined by about 20 percent over the past two weeks.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, says after reaching record levels in early August live hog prices have fallen dramatically.

Dr Ron Plain-University of Missouri

We got carcass prices here in the United States as high as $105 per hundredweight or $1.05 a pound of carcass and then after that we've dropped pretty fast.

We've taken almost $23.50 off of that to get where we are here in the lower 80s.

As to why prices got so high, several factors, it was a miserably hot summer in much of the United States.

Pigs don't like that, they don't grow very fast.

Slaughter weights were way down and also the rate at which hogs were moving to market seemed to be a little bit delayed.

Slaughter during July and August came in lower than USDA had been forecasting but we seem to be playing catch-up here.

This week's slaughter well above what was indicated by the hog and pig report so probably some hogs are coming to slaughter now that would have come to market earlier if we'd had cooler weather and it's started to cool off and so weights are going up and so pork supply is increasing and with that we're getting lower prices.

Dr Plain acknowledges hog producers made pretty good money this summer but what normally happens as we move into the fourth quarter is lower hog prices and it looks like we're soon going to be back into red ink.

He predicts producers will to be slightly in the red in September and October November and December will all be months were hogs prices will fail to cover the cost of production.