Hog and Pork Prices Return to Reality

After reaching never before seen prices the hog and pork markets have come back to reality.​
By: Chris Hurt, Department of Agricultural Economics, Purdue University 

When historians look back on hog prices in 2014, they are going to ask, “What was going on?” Hog and pork prices were launched to almost unexplainable heights by concerns over reduced pork supplies from PED in the spring and summer. More recently, prices have been in descent and now have returned to more realistic levels.

The high price period began to emerge in mid-February of 2014 as media attention began to focus on the death losses from the PED virus. There were media descriptions of nearly 100 percent death losses in some herds with a disease that was spreading rapidly to other herds. There were “rumors” of the possibility of 20 percent reductions in pork supplies. Hog prices shot higher!

By late-March, live hog prices reached near their yearly highs of $98 per live hundredweight. The extraordinary fact is that this was nearly $40 higher than the same time a year earlier, or about 70 percent above year-ago prices. Prices continued to be sharply above year-earlier levels for the spring, summer and into the fall. From March through mid-October, live hog prices this year averaged $86 compared to $68 for the same period in 2013.

Live hog prices are expected to average about $67 to $68 in the final quarter of this year and through the winter. The highest prices for next year are expected in the second quarter, averaging near $70, but then falling to the mid-$60 in the summer and down to the mid-$50s by the fall as pork supplies continue to increase. read more … http://bit.ly/1MHk12Z