By Joanna Levin
THE pig market has fallen sharply over the last week, before and after the release of the quarterly Hogs and Pigs report by the USDA on Friday (26 June). Bearish signs of worsening overproduction have driven futures prices lower. The Chicago August lean hogs contract closed on Monday at 56.62¢/lb, down 2.25¢ from 58.87¢/lb a week earlier.
Total pig inventories climbed 6% from year-earlier figures to 61.6 million head on 1 June. Market hog (finished pig) inventories were up 6% year-on-year to 54.6 million head, while the breeding herd rose 1% from June 1997 to 7.0 million head. Meanwhile the Spring pig crop rose a strong 5% from a year ago to 26.7 million head. With the growth in the breeding herd, many pork industry analysts believe that pig production will increase during the rest of this year.
Cash pig prices have also fallen sharply, to 40-41¢/lb, compared with 43-43.5¢/lb a week ago. Packers have dropped their bids as falling wholesale pork prices have pushed their margins into negative territory.