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U.S. Live Hog Prices Expected to Decline Slowly Through the Rest of 2015

By Bruce Cochrane

An agricultural economics professor with the University of Missouri expects declining live hog prices for the rest of 2015.

Last year Porcine Epidemic Diarrhea caused a tremendous amount of death loss of baby pigs in the United States reducing U.S. slaughter numbers by nearly 5 percent compared to the year before which pushed prices up.

Dr. Ron Plain, an agricultural economics professor with the University of Missouri, observes it looks like June 2015 hog slaughter numbers in the U.S. are going to come in at about 11 percent higher than a year ago making it the highest ever for that month and it looks like those numbers will stay high for another month before they start to decline.

Dr. Ron Plain-University of Missouri:
Last year, with the decline in hog production, we had record hog prices on a carcass basis in U.S. dollars, about $103 per hundredweight on average.

This year lower death loss and a big increase, in fact this year's hog slaughter is expected to be second highest ever and we're looking at an average carcass price in the upper 60s.

As far as next year, right now, it looks like, based on the USDA's June inventory report that hog slaughter in 2016 is going to come in very close to this year's level and, if that's the case, we're probably going to have prices next year also in the upper 60s, close to what we had this year.

Dr. Plain says it looks like the U.S. hog slaughter this year is going to be about 7 percent higher than a year ago as the result of doing a much better job of managing the disease so death loss is way down and we bred more sows and gilts trying to fill in production in case we had more death loss from PED.

He says seasonally June is the odds on favorite to see the highest prices of the year and prices aren't likely to do much other than continue to slowly decline for the rest of the year.

Source: Farmscape


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