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Economist says hog inventory causes price concerns for 2019

The US pork industry has expanded to new record highs.  According to the latest report, the total US inventory was 75.5 million head, up 3 percent on the year.

University of Missouri livestock market analyst Scott Brown says he has a pessimistic price outlook for 2019. “Right now, I have the second quarter of 2019 with the national weighted average for carcass price coming in at $61,” he says.

He tells Brownfield there might be some opportunity for producers to manage risk.  “If we look at where futures contracts are today, especially out there in the mid-part of 2019, there might be some opportunities to hedge some hogs at levels we wouldn’t reach unless we got some pretty strong export growth,” he says.

Livestock economist Len Steiner, president of Steiner Consulting Grop, says exports will play a huge role in producer profitability next year.  “We’re inclined to think you’re going to see more exports next year,” he says.  “Guessing we go from 22.3 percent of production to 22.8 percent.  That will help fix a lot of things.  But, if exports go to 18 percent it would be a debacle here.”

The next Hogs and Pigs report comes out December 21^st.