Farms.com Home   News

Hog Prices Hit Record Highs

Manitoba farmers who have stuck around in the hog business are seeing strong returns, as hog futures prices have spiked to all-time record highs over the last week.

"Without a doubt it's been a remarkable move in the futures over the last week or so," says Tyler Fulton, director of risk management with Headingley-based Hams Marketing Services.

US futures have traded at more than $118 per hundred-weight, or around $10 higher than the previous record high set around two years ago. That means Manitoba farmers are currently seeing forward prices higher than ever before.

"We're talking about forward contract prices for summer on a per hog basis of better than $230 per pig, which would have been unbelievable if you suggested things would get to that level six months ago," he says.

The surge can be attributed to speculation about the impact porcine epidemic diarrhea (PED) virus has had on US market hog numbers, explains Fulton.

"There's evidence to suggest we're going to be dealing with a big hole in the number of hogs available, and consequently prices are adjusting to reflect tight supplies," he says. "It's a very fluid situation because we don't have direct evidence of the losses yet, so the market is building in the expectation. Those expectations range from as low as three percent fewer hogs for the summer months to as large as nine or 10 percent fewer hogs. If we experience a nine or 10 percent reduction in total pork production, we can probably expect a further rally of at least another five or 10 percent."

While the spike will be felt at meat counters in stores, whether it results in decreased demand for pork will be determined in the coming months, he says. He points out pork isn't the only meat option that's priced at historically high levels.

"The unique thing about this is that pork is not an anomaly in this spike in protein values. We have beef that's fundamentally supported at record high levels as well simply due to tight supply, and chicken, while they can ramp up supplies fairly quick, they haven't done so yet," explains Fulton. "There really isn't an opportunity for retail outlets to feature different protein products because they're all very high valued."

Source: PortageOnline


Trending Video

Cow-Calf Corner

Video: Cow-Calf Corner

Mark Johnson, OSU Extension beef cattle breeding specialist, explains when it’s time to assist during calving.