H@ms Marketing Services says the biggest factor that will pressure live hog prices over the next six months will be the large available supply of U.S. pork.
Amid escalating uncertainty on the pork demand side, we’re beginning to see the seasonal increase in hog supply.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says Mexican and Chinese tariffs on U.S. pork at a time of record slaughter hog supplies are generating a lot of volatility.
The primary base that we’re starting from is just really large hog supplies. We anticipated that and we saw last week a weekly slaughter in the U.S. of, I believe, 2.45 million hogs which is huge for this time of year. You see some ebbs and flows through the summer time frame but, generally speaking, that’s a pretty big slaughter for this time and it’s an indication that we’re likely going to be dealing with some pretty big numbers over the next four to five months.
Generally speaking we’ve averaged a hog slaughter that is pretty consistent with what the USDA had projected based on their hogs and pigs report. We anticipate that hog slaughter moving through the October, November, December time frame will be two and a half to three percent larger than year ago levels which will add pressure to the market. It’s not so much that we’re dealing with a concern of whether or not we can get all the animals processed.
The real question now is where the meat will be marketed and at what price. The meat component is the real focus of things.
~ Tyler Fulton, h@ms Marketing Services
Fulton says, while there’s a great deal of uncertainty as to where the U.S, will be selling its pork, the one certainty is that there will be a lot of pork available.
