Economists Forecast Hog Prices Following USDA Quarterly Report

FJ Live 062620 - Alan Brugler Hogs and Pigs Report
( National Pork Board and the Pork Checkoff )

Agricultural economists shared their forecast prices for the next several quarters following the June 25 announcement of the June 2020 Quarterly Hogs and Pigs Report in a teleconference funded by the Pork Checkoff.

Using the national-base live equivalent 51-52% lean pricing system, Scott Brown, associate Extension professor at the University of Missouri-Columbia, estimated $42.50 per cwt. for first quarter 2020, $40.00 for second quarter, $40.00 for third quarter, $37 for fourth quarter and $43 for first quarter 2021. 

Lee Schulz, associate professor at Iowa State University, quoted his prices for the Iowa-Minnesota producer sold weighted average carcass base price for all purchase types series. He noted that basis forecasts along with lean hog futures prices are used to make his cash price projections. Actual prices for first and second quarter 2020 were $61 per cwt and $57 per cwt, respectively. Schulz’s prices were $51 for third quarter 2020, $53 for fourth quarter, $62 for first quarter 2021 and $69 for second quarter 2021. His 2020 price average is $55 per cwt.

David Miller, chief economist at Decision Innovation Solutions, based his price forecast on the producer sold national weighted average pricing system. He shared prices for first quarter 2020 at $60.85 per cwt., and second quarter at $57.76. He forecast third quarter at $52.20 and fourth quarter at $44.89. For 2021, he forecast $51.72 for first quarter and $57.76 for second quarter, assuming the packing plants get caught up on the backlog of pigs. If the backlog continues, he said he’d drop the second quarter number 10%. 

“I’m a little more bearish that the general economy turndown will be worse than I thought earlier on,” Brown said. “As I think about the report today, it’s a bad combination of more hogs than we would have anticipated and not as much adjustment to breeding inventory relative to what we would have thought. It looks to be a softer demand picture as we go through remainder of 2020.”

Read more about the June 2020 Hogs and Pigs Report.

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