A federal report finds fewer hogs are being brought to market nationwide and in Iowa, which is the country’s number-one hog producing state. Gerry Bange, chairman of the U.S.D.A.’s Outlook Board, says hog slaughter rates may be down due to the spread of a virus that’s striking hog lots.
“Packers are out there looking for the hogs and they’re having difficulty so that could be leading to the bid-up in prices,” Bange says. “One thing’s for sure, even with the bid-up in prices, the hogs are not coming forth and that suggests a problem there and it may, in fact, be reflecting this virus situation.”
A year ago, the porcine epidemic diarrhea virus or PEDV was reported in hogs in one state. Now it’s in 26 states, including Iowa. With the hog numbers dropping, Bange says the demand and the prices are rising. “The price is $67.13 per hundred-weight for 2014, that would be an increase of nearly 5% from the $64.05 recorded last year and about 7% higher than our previous forecast,” Bange says. “Given the strong demand and the tight supply, we’re looking at a pretty strong price.”
The U.S.D.A. report finds some beef producers are sending their herds to market sooner, but production numbers for beef are also dropping, down about four-pecent from last year, which is driving up prices and demand. Bange says prices will continue to climb and another $6 was added per hundred-weight to the latest forecast.
Bange says, “That’s a very, very sharp increase for any given month and reflects the strong prices we’ve seen to date which really reflects the very good demand we’re still seeing and the very, very tight supply.”
The U.S.D.A. is forecasting the average steer price at $142-plus per hundred-weight, up 13-percent from last year. Reasons for the drop in cattle production include: the drought in the West, dry conditions in the southern Plains, and the severe just-ended winter in the North.