• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Gloomy Prediction!

A

Anonymous

Guest
Industry News - PM
$10 hogs this fall, analyst predicts

By Tom Johnston on 7/3/2008


Predicting live hog prices not seen since the liquidation of 1998, Credit Suisse food stocks analyst Robert Moskow said prices could plummet to $10 per hundredweight given the likely increase in number of hogs coming to slaughter this fall at packing houses already running at capacity.

Moskow said in a note to investors that more hogs will go to slaughter this fall because the herd is too large, citing USDA's June Hogs and Pigs report that showed a 5.8 percent increase in the herd. By comparison, market analysts had expected the report to show about a 4.6 percent increase.

He noted that sow farrowings in the March-May period are up 2 percent over the same period last year, "which means the pig crop will be bigger, not smaller in the fall."

Slaughterhouses already are running at capacity and perhaps beyond it, Moskow said.

"We would not be surprised to see hog prices fall to $0.10/lb. at some point this fall. This is what happened during the liquidation of 1998," he wrote, citing a time when prices crashed to $8 per hundredweight in the fall of that year and forced the industry to contract.

Ron plain, an agricultural economist at the University of Missouri, agrees, saying $10 per hundredweight prices "are possible."

"I expect hog slaughter capacity to be a bit higher this fall than last. Packers are constantly mechanizing and pushing up thier capacity," he told Meatingplace.com. "However, there is always the risk that something will happen to shut down a plant. This fall, that would not be good."

The silver lining, Moskow noted, is farrowing intentions are expected to be down 2 percent through August and down 4 percent through November.
 

Latest posts

Top