An agricultural economist with the University of Missouri anticipates the profitability of North American pork producers will continue to improve as we move toward the first day of summer.
North American pork producers have seen some dramatic improvement in profitability over the past three to four weeks fuelled by the normal seasonal decline in hog supplies, reduced feed costs and higher demand for pork.
Dr. Ron Plain, an agricultural economics professor with the University of Missouri, says typically we get the biggest upward movement in hog prices during May than any other month, oft times adding ten dollars per hundredweight or more to carcass prices and we’ve done that again this year.
Two things happen to push hog prices up at this time of year.
One is the number of hogs available for slaughter tends to decline.
Most hogs go to slaughter at roughly six months of age and summer hog slaughter is pigs born during the winter and we have fewer pigs born at that time of year so there’s fewer available for slaughter here as we move into summer.
The other thing, temperatures start to move up.
Not so much in Canada but much more so in the United States.
It gets a little too hot for pigs to be comfortable.
They don’t eat as much, don’t grow as fast and the net result is when they go to slaughter there’s fewer pounds of pork there.
That combination usually gets us the highest prices of the year sometime late spring or early summer.
Dr. Plain notes U.S. hog prices have moved into the low 90s and the futures market is optimistic that they can climb a tad higher as we move toward the first day of summer.
He says, with the largest number of acres of corn since 1937 expected to be planted this year in the United States, we’ll be looking at a billion bushels more corn than has even been produced in the U.S. and that could allow corn prices to fall by two dollars a bushel.
