By Joanna Newman
THE volatile US pig market has soared about 10% this week – although there is little fundamental change to justify this leap in prices.
The cash value for lean pigs climbed from 34¢ a week ago to 38¢/lb by Monday (22 March) and packers plan to raise their bids to 40¢/lb (54p/kg) by the end of the week.
The Chicago April lean hog futures contract settled on Tuesday (23 March) at 44.0¢/lb (60p/kg), up from 40.9¢ last week.
The monthly US Department of Agriculture Hogs and Pigs report, due for release at the end of the week, is helping to drive prices higher.
Producers hope to see a sharp decline in the breeding herd which will alleviate oversupply in the domestic industry.
But analysts warn against over-optimism, pointing to the continuing high operating rates of major producers.
Certainly the high slaughter rate of almost 2 million head a week in recent weeks should translate into an improved supply and demand balance in the USA.
During February, US slaughter houses processed a record 7.9 million pigs, up 3% from 1998.
Renewed talk of pork shipments to Russia and South Korea is also fuelling optimism.
Rumours of food aid programmes to Russia have been one of the factors pushing pig prices higher since the start of the year.