University News for May 14, 2012
An agricultural economist with the University of Missouri says demand for pork in both the domestic and export markets will be a key factor influencing live hog prices moving forward.
Typically, in late April and May, as temperatures rise slowing hog growth and consumer demand for pork increases due to barbecue season, we see a very fast run-up in live hog prices but that hasn't happened this year and, contrary to normal seasonal cycles, prices are actually lower than they were six weeks ago.
Dr. Ron Plain, an agricultural economics professor with the University of Missouri, says combined with the lower hog prices we've seen a softening of both domestic and export demand for pork.
Clip-Dr. Ron Plain-University of Missouri:
On the domestic market the big thing is of course the economy and how much money people have in their pockets.
The economic situation in the United States has been one in which we're growing but very slowly.
The number of people with jobs has not increased very much since the end of the recession a few years back so that's worrisome.
And then the export situation is huge.
We export over 20 percent of the pork we produce here in the United States each month and it looks like that's getting soft.
China bought a lot of U.S. pork last year and it looks like they've got their production up here in 2012 and hog prices are dropping and that kind of situation means China is not going to be importing very much pork.
That's a real concern that if exports slow down at the same time domestic demand is soft, we could see some very disappointing hog prices this year.
Dr. Plain adds there is concern that increased feed supplies following the 2012 harvest will push down feed costs triggering an expansion of the U.S. breeding herd.
If so, he says that will mean more hogs on the market in 2013 and unless we get some better demand that could be a tough situation.
For UniversityNews.Org, I'm Bruce Cochrane.
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