The demand side of the hog market remains strong. Paragon Economics President Steve Meyer credits a rebound in domestic demand. In addition, export demand has been very good…
"November and December were much better in terms of year over year on exports and we got close to setting a record on value of exports in 2010. And that's even gotten better, I think, as 2011 has gone along with the situation in Korea."
Meyer says summer futures demand is much higher than one year ago - creating marketing opportunities for producers. For pork, competing meats offer encouraging news for the hog market. Meyer says the cattle herd continues to downsize:
"We saw a much higher beef cap slide last year. We had the smallest cow herd since 1963. The last three years has seen the three smallest cash crops since 1950. The supply of feeder cattle out there is getting tight and when it gets tight we're going to see beef prices get significantly higher toward the end of this year and into 2012 and that will be positive for pork..."
The chicken supplies are holding steady - which Meyer says is also positive for hog producers:
"On the chicken side, last fall it looked like they were going to really put a lot of product on the market and probably screw things up for everybody. But they've looked higher costs and negative returns since November and the chicken companies have scaled back as well... They're not cutting back but they're not growing at six, seven and eight percent like they were there for a little while in the third quarter. So that's encouraging as well especially if they can increase their exports this year."
For more information, producers can contact the Pork Checkoff Service Center. Go to www.pork.org or call 800-456-PORK.