It’s hard to point a finger at any one thing that is causing the volatility in today’s marketplace. Bacon prices are the highest they’ve been in 40 years. The latest Hogs and Pigs report shows some contraction. AgDay’s host Clinton Griffiths asked analyst Jim McCormick of AgMarket.net what this means for the hog market.
We’re in for some volatile times, McCormick said on AgDay TV.
“I think it’s going to get really interesting. The hog herd got smaller, a lot of contraction had to do with feed prices,” McCormick said. Add to that plant shut-downs at the beginning of the COVID-19 crisis and the need, and the result are the problems the industry faces now. Prices are high, it’s time to bring the supply back, but a problem remains.
“There is a worker shortage in the middle in rural America, as well as in the downtown cities. So even if you have a big hog operation and say, ‘I want to expand my production.’ Do they even have a labor force to do it?”
In the long run, McCormick said this could mean higher hog prices and essentially higher food prices for the Americans.
Teaching a Kid to Drive a Stick Shift
What the U.S. economy has been through is nothing short of incredible.
“We shut down a trillion-dollar U.S. economy, not to mention the economies around the world, and now we’re ramping back up,” McCormick said.
He said the economy right now is like a kid learning to drive a stick shift.
“It’s very erratic. It’s always stalling out,” McCormick added. “And that’s kind of where we’re at.”
He believes the situation will continue for at least another year or 18 months. Not only will it take time, but he also believes economically, the U.S. isn’t set up for this challenge.
“We have one of the biggest economies in the world that’s really running hot on the economic engine,” he said. “The demand’s there for the product. It’s just getting there. It’s going to take time, unfortunately.”
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