Futures File: Lean hog prices wallow
By Walt and Alex Breitinger, Futures File
Traverse City Record Eagle (MI) - Jun 27, 2020
Pig prices are grinding to new lows, with August lean hog futures dropping under 48 cents per pound on Friday.
Back in early May, when the COVID-19 outlook was optimistic, August hogs gained more than 30% to reach 67 cents per pound, a sign that markets were expecting stronger demand by the end of the summer.
Now, as the U.S. coronavirus case count is climbing, markets fear that slaughterhouses could remain hard-hit by coronavirus outbreaks, sapping demand for hogs yet again.
On Thursday, concerns about an oversupplied hog market were confirmed, after the U.S. Department of Agriculture released its Quarterly Hogs & Pigs Report. The government data showed that hog herds were 5% larger this year, exceeding expectations. Worse yet, the hog population rose most sharply for heavy-weight pigs, a sign that there is an overabundance of slaughter-ready animals that canít be sold.
If pork processing remains a bottleneck, there could be an excess of animals and a shortage of meat, which will keep pork prices high for anyone who canít dress a hog themselves.
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