Hog prices continue to be higher

Hog prices remain high despite large supply

The most important reason for higher prices involves favorable international trade for U.S. pork, says Chris Hurt. (ag.purdue.edu)

URBANA, Ill. — Despite more hogs coming to market this year, the price of pork remains higher. Todd Gleason has more on some of the reasons why.

For agricultural commodities, larger supplies generally result in lower prices. This year’s hog market is going against that adage with both larger supplies and higher prices. Purdue University Extension Agricultural Economist Christ Hurt says this is because demand is really good.

Hurt: The most important reason for higher prices involves favorable international trade for U.S. pork. Pork exports have been up 17 percent and pork imports have been down 10 percent. For trade data available so far this year, pork exports have accounted for 22 percent of our domestic production.

This is the strongest export showing since 2012, the year of record exports. Shipments to Japan, that nation imports more pork from the United States than any other, are up eight percent. Mexico, the second largest customer, has purchased 33 percent more pork than last year. South Korea is in big too, up some 32 percent form last year. South Korea ranks number four. All this extra demand, says Hurt, is plowing through the increased supply of pigs in the United States and it shows on U.S. grocery store shelves.

Hurt: With about two percent more production in the U.S. so far this year, the amount of pork available to U.S. consumers is actually down about one percent because of favorable trade. When population growth is considered, the available pork per person in the U.S. has been down about 1.7 percent for the year.

This fits the theme of larger production and higher prices, with the strong export demand being the primary driver so far this year. And it is a theme Chris Hurt expects to continue into the summer and fall.

— Chris Hurt, Extension Agricultural Economist – Purdue University and Todd E. Gleason, Farm Broadcaster

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