A mean-spirited grinch snatched away presents in December that the market had been giving hog producers, but they might be returned in the new year.
“We’ve come off very hard; the shine has come off it,” said Manitoba Pork Marketing Co-op market analyst Tyler Fulton just before Christmas.”It may be just a blip. We’ll have to see.”
Cash market prices in the United States slid from the start of December until Christmas by 15 to 20 percent, although prices were still excellent compared to a year earlier. University of Missouri hog market analyst Ron Plain estimated cash prices after the slide were still 37 to 40 percent higher than at the same time in 2003.
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Cash market pig prices were pushed higher than expected in 2004 because of surprisingly high domestic and export meat demand. Although futures prices did not roar up with the same energy as cash prices, overall prices were excellent.
Fulton said the unexpected domestic demand that propelled the higher prices has not disappeared, but huge export sales of U.S. pork have begun petering out, leaving more pork in North America.
“The domestic market is finding itself flush of pork, where it wasn’t there four or five months before,” Fulton said.
U.S. pork exports have increased for 13 years in a row, but exports grew much faster in 2004 than in recent years.
Fulton said the slower offshore demand for U.S. pork surprised the markets, but no one knows whether the demand tide has turned.
“There’s going to be a lot of focus on whether they’re going to come back into the market in the new year,” said Fulton, who attributed some of the December price slump in part to a short-term phenomenon caused by Christmas. Wholesalers stockpile hams in the months leading up to the holidays and then back off once Christmas arrives.
Demand may even out in January as normal consumption patterns return.
“It may just be a short-term thing,” Fulton said.
