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Meyer: Second half of 2019 could be ‘extremely good’ for hog farmers

Bountiful harvests are contributing to a better hog outlook, but the industry is anxious for additional processing capacity. U.S. pork producers will have a good, but not great 2019, according to Dr. Steve Meyer, an economist with Kerns and Associates.

“The second half [of 2019] could be extremely good,” Meyer told Brownfield Ag News Wednesday, after addressing the Missouri Pork Expo in Columbia, Missouri. “I think the thing that’s really positioning us for some success is the fact that we have relatively low costs because of several good crops in a row.”

New pork processing capacity, including two new plants that began operations the same day in 2017, made a positive difference in the hog market, said Meyer, but now delays in bringing additional capacity on line have backed up hogs by a couple of months. A plant was scheduled to open in December, for which Meyer says hogs were procured in January and February. The plant’s opening is pushed back to early March.

“We think that that’s been one of the things that’s weighed on this market some in the last few weeks,” Meyer told Brownfield.

The market, said Meyer, could move either way depending on what happens in the next few weeks. He cites “huge bottom side risk” if African swine fever hits, but on the other hand, depending on the results of on-going trade talks with China, Meyer expects price response to the high side if that country is back in the market for U.S. hogs.