LE MARS, Iowa (KCAU) – Since March 20th, lean hog prices have been on the increase, going up more than $15. The trend has surprised many people, including pork producers.
Iowa State University Extension Agriculture Economist Lee Schultz says the hog market has been rocked with volatility. He offered an explation of the latest market trend:
“I think what was driving the lower prices in the early part of 2019 was impacts of retaliatory tariffs, and impacts on the trade that we expected,” Schultz said.
“Through March and April, we really [saw] the impact of (African Swine Flu) in China, and the potential for global protein demand from China, and that really made our markets rocket up here.”
“Recently, I think it has been the markets, the supply situation weighing on it a bit, as well as now the new news of the delay in the trade negotiations talks I think has all been working on the market, and why we see such volatility lately,” Schultz added.
Schultz says we are entering the key period of demand for pork, which should also help keep prices somewhat higher.
“We’re into baseball season. That’s usually the ramp-up to summer grilling, and now we have three really big summer holidays in front of us with Mother’s Day, Memorial Day, and Father’s Day,” Schultz said.
“While a lot of purchases have already been made for Mother’s day, we’re looking still at several holidays in front of us, and demand is very strong. I think the real question is when we get into the dog days of summer,” Schultz added.
The Iowa State University Agriculture Economist says profitability levels are higher for the pork producer than what has been seen for the last few years. Schultz says prices have dipped a bit within the last couple of weeks, but he remains optimistic for a bullish price outlook for pork producers for the remaining months of 2019 and into 2020.