Rebound in Live Hog Markets Dependent on Continued Steady Pork Demand

US - [email protected] Marketing Services says a strengthening of North American live hog prices will be dependent on a continued steady demand for pork, writes Bruce Cochrane.
calendar icon 1 December 2016
clock icon 3 minute read

North American live hog markets have faced steady downward pressure over the past couple of months as the supply of available hogs has approached or exceeded US slaughter capacity.

Tyler Fulton, the Director of Risk Management with [email protected] Marketing Services, says hog numbers have far exceeded expectations by the USDA in its last Hogs and Pigs Report and industry traders.

Tyler [email protected] Marketing Services:

In the US we think we understand where the hog slaughter capacity is and so we think that we've bumped up against that level on two or three possible weeks at around 2.53 million hogs.

With last week's trade impacted by the US Thanksgiving, it was significantly lower than that but we expect this week and probably one or two more of the weeks between now and Christmas to experience that maximum slaughter capacity and so we're not out of the woods yet in terms of cash market lows.

The hope is, when things start to settle down maybe after the holidays, is that the competition for live hogs will really start to pick up as we move down from being so close to the hog slaughter capacity and we'll get a good recovery.

But that recovery in prices is contingent on good pork sales both domestically and into export markets.
Currently export markets have been struggling to put up decent gains.

Fulton says, to date, the wholesale pork market has preformed quite well.

He says given that pork production has averaged three and a half to four percent higher than year ago levels the benchmark for wholesale pork prices has stayed relatively steady.

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