US hog futures up slightly amid pork price surge

US hog futures rose nearly 2 percent on Thursday to a six-week high amid a surge in the wholesale price of pork to the highest level in eight months.

Meat packers reducing the rate of hog slaughter and a pickup in demand have helped to lift the average pork price by 18.5 percent, or US$9.89, since slumping to a six-year low of US$53.44 per cwt on June 24.

US Agriculture Department (USDA) on Wednesday (July 15) reported the average pork price rising US$3.28 to US$63.33 per cwt, its highest since October 28.

August lean hogs closed up 1.200 cents at 65.225 cents and October was up 1.375 cents at 60.475 cents. August posted a six-week high and October a five-week high.

The pork market had been under a lot of pressure the past couple of months due to the weak economy and AH1N1 flu reducing pork exports. The industry has been paring down the hog herd.

Traders noted the advance was limited by the large premium of futures to cash prices and concern there is still a large amount of meat that has to work through the pipeline while the economy tries to recover from the recession.