Will Hog Prices Return to Those of 1998?
The hog market is seeing prices it hasn't seen since 2009. Seven years ago, the prices got lower than what they are now, but then experienced a rally.
"When prices get to these historic lows, they're not here for that long," said Naomi Blohm, a senior market advisor at Stewart-Peterson to Chip Flory on Friday. "Are we out of the woods yet? No. Could it get worse? Probably."
During the week of Dec. 18, 2015, hog slaughter peaked at 2.499 million head. Those numbers were seen as maxing out the packing industry capacity, and now the limit is lower because of a plant closure in South Carolina.
According to Flory, this is "concerning" because of what happened to the hog market in 1998.
Farmers tried to give their hogs away to avoid having the feed costs when the hogs weren't worth much.
Slaughter houses were at capacity, going past shackle space.
With October being National Pork Month, Blohm believes this could create more demand.
Could this happen in 2016?
Listen to Blohm on Market Rally above.
