Another hog price crash this year doesn’t appear likely
About a year ago, hog prices, which had been slithering down a slippery slope since summer, careened off a cliff and plunged into the abyss.
They crashed at about $50 per 100 kilograms in December.
It was a slow climb back up. Producers lost money on each hog sold until May and then tread a knife-edge between profit and loss through most of the summer. Only in August did prices top $130 per ckg, good enough to ensure a profit.
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The calendar came full circle last week when prices jerked down once more, sending a chill through the industry.
Will the crash of 1998 revisit in 1999?
Some of the conditions are the same.
Last year, the United States hog industry, which sets the North American price, was bursting at the seams.
U.S. slaughter plants were killing more than two million hogs a week and the freezers were packed with hams, bellies and loins.
Slaughter has again topped two million a week.
Pork supplies are backing up and the value of the meat from a carcass dropped by six percent last week.
And to top it all off, turkey season is fast approaching – normally a time of weaker pork and beef demand.
If you are a hog farmer, you are probably starting to sweat.
Happily, several new factors reduce the likelihood of a price crash, although weaker values are forecast for the next six weeks.
Consumer demand is much stronger this year than last. A remarkable appetite for all types of meat, including pork, has kept prices afloat despite the flood of pork pouring onto the market.
Also, U.S. hog slaughter this fall has been three percent ahead of forecasts based on the U.S. Department of Agriculture September hogs and pigs report.
Analysts such as University of Missouri’s Glenn Grimes say cool autumn weather in the corn belt allowed hogs to fatten quickly. This means extra slaughter today but less supply in a few weeks.
Although no new slaughter plants were built in the U.S., they are more efficient now and can handle the two million-plus head more easily.
Finally, the U.S. breeding herd is down eight percent from last year, promising fewer market hogs in 2000.
The Ontario-based George Morris Centre’s Canadian Pork Market Review forecasts prairie hogs will fetch below $100 per ckg in late November, $105-$100 in December and $120-$130 in the first quarter of 2000.
