Economists say hog markets are in for a bumpy ride
Ag economists expect the wild ride in the hog markets to continue for at least the next several weeks and even possibly months.
Ag economist Jim Mintert, director of Purdue’s Center for Commercial Agriculture, says demand uncertainty is going to be the big driver behind the volatility. “The real concern is going to be what happens to pork product prices and in turn hog prices as we see the impacts of COVID-19 spillover into increasing unemployment, lower consumer income levels, and also the potential impact with respect to pork exports,” he says.
The USDA’s latest Hogs and Pigs report shows the March 1 inventory of all hogs and pigs at 77.6 million head, which is up 4 percent from a year ago. While that’s a record for this quarter, Mintert says the industry wasn’t surprised by the number.
John Nalivka, president of Oregon-based Sterling Marketing, says he anticipates producers breaking-even by the end of this year.
But, he says, that is subject to change based on the duration and overall impact of the coronavirus outbreak. “We’ve produced a record amount of beef this year, a record amount of pork again, and it will take this export market to find support in these markets once we get on the other side of coronavirus,” he says. “We’ll start to get into some seasonal patterns on both demand and supply.”
Both Mintert and Nalivka made their remarks to reporters during the Pork Checkoff’s media call following the release of the latest Quarterly Hogs and Pigs report.