By Bruce Cochrane.
An anticipated reduction in hog numbers, resulting from production problems caused by inferior boar semen extender, could result in a counter-seasonal window of higher live hog prices during the pre-Easter period.
Since the beginning of this year, solid domestic demand for pork and improved export demand have resulted in steadily improved live hog prices.
Perry Mohr, the General Manager of h@ms Marketing Services says, while the market is leveling out, a potential production problem could result in reduced slaughter numbers which could push prices higher.
Perry Mohr-h@ms Marketing Services:
On a go forward basis, right now the U.S. slaughter is about 1 percent higher than what USDA projected for this time frame.
We are hearing rumors of a problem that many producers had, especially producers that use artificial insemination, with a boar semen extender that was not working properly and resulted in some sows not being bred as well as some sows that were actually bred having reduced litter sizes.
We expect that those hogs will start coming to market very shortly.
When you try to speculate the actual impact that this is going to have, we have heard just recently that it could be between 3 and 5 percent less hogs coming to market as a result of this issue for probably a 3 or 4 month period.
We are actually starting to poll our own producers to see if they have been impacted by this and, if they have, to what degree so that wee can get a handle on the number of hogs that we will have to market to the processors that we sell to this summer.
Mohr says we typically see a little bit of a lull in the market from 5 weeks before Easter until just after Easter and we are just entering that period this week.
He says, if this boar semen extender problem becomes an issue, we may actually see a counter-seasonal move in the market.
Source: Farmscape