There were some reassuring signs for hog producers last week, following the release of the United States Department of Agriculture’s report on swine.
The report showed that as of Sept. 1, the number of breeding sows in the U.S. was down eight percent from last year. The drop was bigger than expected, said Janet Honey, Manitoba Agriculture’s manager of market analysis.
USDA also reported pork belly stocks, although still high, were down to about half what they were the previous month.
This information bodes well for futures prices. But Honey was cautious about what might happen.
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She predicted prices in the first quarter of 2000 will be about $130 per hundred kilograms. Prices in the second and third quarters could reach $148 per ckg.
For the rest of this year, she expects prices to hover slightly above the break-even point for producers who grow and mill their own feed.
“I think the big problem this year is the fact that stored stocks of pork in the U.S. have been very, very large,” Honey said Sept. 24. “Packers really haven’t had any incentive to pay more than they have to for hogs.”
But there are some other positive signs.
Asia is starting to shake off its economic malaise and the Japanese currency is getting stronger. The so-called Asian flu was one of the reasons cited last year for the downturn of North America’s hog industry.
“They should be buying more pork,” Honey said. “The trade should be good.”
Gerry Friesen, president of Manitoba Pork Marketing, said he’s taking a wait-and-see approach before getting his hopes up for higher prices.
Futures prices on hogs have been volatile during the past six months. “Any rumor of any kind can send them either way,” he said.
Friesen said hog producers haven’t made money this year, let alone recoup the money they lost after prices tumbled last fall.
