Fewer Hogs and Higher Prices
The latest Hogs and Pigs report is good news for pork producers. The report shows fewer hogs are being raised in the United States and that, in turn, should boost prices. Pork producers say they’ll reduce the size of their breeding herds. Or at least that’s what the latest Hogs and Pigs report showed.
Purdue Extension Agricultural Economist Chris Hurt says farrowing should begin slow this spring and summer. However, right now, the breeding herd is as big as it was at this same time last year. Still, it’s a pattern of change and reduction …
“The herd had been moving through an expansion phase, which began in the last half of 2014 through 2015. Well, that expansion was largely because of record high profits due to baby pig losses from to PED. That expansion phase has seemingly now ended.”
This ‘ending’ is a bit uneven geographically. For the 16 states USDA surveys for the March report, some states were up, some were down, but Hurt says it’s the forward looking projections that provide hope for higher pork prices…
“Looking out to the first quarter of 2017, with our current information, pork supplies would be about 1% smaller.”
Hurt’s price forecast for market hogs then is in a range of $49 to $54 for all of 2016, about $1 higher than last year. He expects prices to rise to the $55 to $58 range for averages in the second and third quarters, normally the grill-out seasonal highs, and then to finish the year in the mid-to-higher $40s.