In the last year there has been dramatic swings in the lean hog market, says AgDay’s Clinton Griffiths, and the scene today is setting up to be dramatic as well.
“It really is crazy, the turn of events in this hog market. You know, it wasn’t that long ago—18 months ago—it just seemed like we were going to zero. Literally,” says Chip Nellinger of Blue Reef Agri-Marketing. “We were overwhelmed with supply, overproducing and then, COVID-19 hits. And that was the start of this.”
A year ago, there was a lot of liquidation due to the COVID-19 situation and plant closures, he continues, but China has massive demand and we’ve been selling a lot of pork to China because of their continued issues with African swine fever (ASF).
“Throw on top of that our own health issues here. We’re really struggling with PRRS. There are empty barns in the Western Corn Belt and we’ve got an explosive situation. You already have in mid-March $100+ hogs out there and knocking on the door of all-time highs,” Nellinger says. “We haven’t even hit the peak grilling season, or the peak demand period here in summer.”
This week’s USDA Hogs and Pigs Report could be volatile on the time frame, but a shining star on the demand side and price potential is the hog market right now, Nellinger notes.
How far out on the market should we be looking?
“I think as you get into the June to August time frame, when we normally see that seasonal price peak for hogs, I think it does make sense given the historic high levels that we’re at to look out there six to nine months. I know we’ve got higher feed costs in here with corn and meal prices higher than what they’ve been in the past, but there’s some really good profitability out there, especially for the third quarter of this coming year,” Nellinger says.
