H@ms Marketing Services suggests, two hog processing plants expected to come on line next month will be key to easing the pressure of increasing hog supplies.
The seasonal increase in hog supplies is just now beginning.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says we’re through the lowest hog slaughter of the year in the United States.
Generally speaking, the quickest growth that we to see over the next six months is really in the next month. When we move out of that hot summer time frame, there’s kind of some compensatory growth in the animals and we expect to see weekly gains of even one to two percent more each week over the course of the next four or five weeks or so, which is putting pressure on prices.
Hog supplies along with pork supplies in general are expected to increase about 10 percent, maybe as much as 12 percent over the course of the next three months. That will take us to the heaviest time of the year and actually likely to the highest production that the United States and North America in general has ever seen.
We’ve got two new plants that we still anticipate will come on stream, into production sometime in the month of September which should have a positive impact on the cash market. But if we significant delays in those plants, one in Michigan and one in Iowa, in them coming on stream then that could be worked into the market as more pressure of supply builds against the market.
~ Tyler Fulton, h@ms Marketing Services
Fulton says we’re holding the line on pork exports but the driver is likely to be domestic market. He says pork is well positioned compared to beef or chicken so domestic demand should continue to be supportive but we’ll have to find a home for three to four percent more pork in the fourth quarter of this year than last and last year we saw record supplies.
