March 19, 2008

US meat production and storage forecast to influence live hog prices
 

Pork and poultry production as well as volumes of meat in cold storage are expected to be key factors influencing live hog prices for the rest of 2008.
 

Live hog prices improved in February but it has since started to drop in the past few weeks and cause has been attributed to overproduction.

Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture, said that US cold storage is packing more pork and poultry as slaughter numbers rise continuously in early 2008, and that pushes down meat prices.

US poultry stocks have increased by about 100 million pounds whereas pork stocks increase have exceeded that amount, despite a relatively strong pork demand, according to Marceniuk.

Marceniuk pointed out that overall meat production in early 2008 is important in determining meat prices, and a cutback in pork and poultry production is required to improve prices.

The December USDA report showed US hog production was increasing, but recent losses would soon lead to a cut in production, said Marceniuk.

In addition, Marceniuk highlighted the importance of increased exports, which would be very helpful in reducing meat storage levels.