July 23, 2004
Global Demand Expected to Drive US Hog Prices Into the Fall
With US weekly slaughter numbers for 2004 about four percent higher than 2003, global demand for pork will need to stay strong to maintain hog prices.
Since late April pork prices have rebounded strongly.
The SPI index 100 weekly pool price peaked at about 192 dollars per hundred kilograms for the week ending May 21st, and current prices are ranging from about 170 to 180 dollars.
Sask Pork Industry and Policy Analyst Brad Marceniuk says a combination of factors has contributed to the current higher than average prices and a number of issues will guide prices into the fall.
"Higher pork prices in recent months have been driven by increased global demand for pork with consumers in some countries reducing beef and poultry consumption.
With the North American BSE ban on beef by many countries, there is no North American beef being imported by many countries such as Japan.
The bird flu, or avian influenza, has also forced millions of chickens to be slaughtered particularly in the Asian countries.
In Japan, the consumption of pork was up 45 percent in April while chicken was down nine percent and beef down two percent.
Some of the market factors to keep an eye on over the next couple of months include any changes to the North American beef trade as well as the lifting of any import bans for beef.
Moreover, with the recent announcement by Japan to put import tariffs on pork, pork trade is also a factor to focus on.
Japan is a very important market. They represent about 30 percent of the pork that is imported in the world.
Marceniuk says prices typically drop during the fall with higher supplies and lower demand. Therefore any changes in the global meat trade or consumer preferences over the coming months will likely determine where prices will go.
He says, right now, it seems like prices for index 100 hogs will range from 150 to 160 dollars per hundred kilograms for August and September falling below 150 dollars into October.
