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Hog producers should prepare for more volatility

Cash and futures hog prices have been on a roller coaster lately and a livestock economist says that volatility is likely to continue.

University of Missouri’s Scott Brown says the recent rally has been based all on demand.  “It certainly hasn’t come from the supply side,” he says.  “Because we’re going to continue to talk about growth in production.”

He tells Brownfield the reports that China hasn’t been able to control the spread of African Swine Fever has been a huge factor in the recent rise in hog prices.  “I think US markets are looking forward to the opportunity to move more product to China,” he says.  “And that’s where we’re going to get this on-again/off-again.  If we get information that maybe the disease isn’t as bad we’ll get prices moving down, if we get more information that African Swine Fever is worse – we’ll see prices move higher.”

But, Brown says the total losses in China are still unknown and the lack of information adds to the volatility to the market.   He says the trend of prices moving sharply higher one week and moving lower the next will likely continue for the foreseeable future.