By Joanna Levin
THE US hog (pig) market rallied early last week on news of forthcoming export credits for pork to South Korea, as well as obstinacy on the part of producers who refused to sell at lower prices to US packers.
But prices slipped again late in the week due to fears of oversupply and large amounts of pork in cold storage.
The June lean pigs contract closed Friday April 3 at 50.2¢/lb (30p/lb), compared with 58.575¢/lb a couple of weeks ago. And yesterday (Monday April 6), the market was sharply lower in early trading.
Pork production in February dropped 10% from January and monthly cold storage actually rose 4% in February from Januarys stock level of 446m lbs, indicating a drop in consumer demand.
US producers are building new pig-rearing facilities and there could by 7-9% more pigs ready for slaughter over the next six months compared with last year.
Lean pig prices are at their lowest since spring 1995. Brokers remain extremely cautious. The ongoing economic upheaval in Asia and currency depreciation in many Asian countries, especially Korea, is hurting pork exports significantly.