By Joanna Levin
AFTER a steep price drop in late August, the US pig market has recently stabilised at low levels. The Chicago October lean hog contract settled on Friday 4 September at 37.12¢/lb. This was little changed on the previous week, but down from about 45¢/lb a month ago.
The market still suffers from high inventory levels of pork which could drive prices even lower. Cash hog prices have reached their lowest point so far this year at 26.00¢/lb, compared with 32.50¢/lb at the end of August.
Packers have been able to drop their bids given the ample availability of live pigs on offer from producers. Slaughter rates are running at a high of two million head per week and this is expected to continue to at least the end of the month.
Analysts fear that global economic problems, especially in Russia and the Far East, could have an effect on US pork exports. Many traders are warning of further price drops within the pork industry in weeks to come.