August 29, 2020

 

Oversupply of US hogs hounds industry

 

 

The oversupply of hogs in the US pork production system is seen to worsen in the long run, as many meat-processing facilities remain or may shut down due to the lingeringCOVID-19 pandemic.

 

Agricultural economist Steve Meyer of Kerns & Associates said in a webinar recently that the backlog of hogs stands at about 1.4 million head and that it may increase to almost 3 million by yearend, Brownfield Ag News reported.

 

"It won't get much worse in September, but, beginning in October if we can only run 95 percent, we're going to add to that thing virtually every week.  And be close to up to 3 million head (backed up) by the end of the year", he was quoted as saying.

 

Meyer said an improvement in slaughter capacity, even if it's only slight, would help.  "Running at 97 or 98 percent will keep that number much more in hand. But it won't allow us to catch up any in the fourth quarter because supplies are going to be so large", he added.

 

He also said the outlook for hog prices is bleak through the end of the year.

 

Earlier in July, Meyer said higher demand or lower supply are the only ways to improve prices. "I don't think demand will bounce back soon so that leaves just one option", he stated in an article posted by National Hog Farmer.