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Pork producers are facing a very tough fall

A commodity broker says pork producers could be facing a very tough fall.  Dennis Smith with Archer Financial Services says the industry is in the process of actually challenging slaughter capacity and that isn’t a good thing.

He says pork producers haven’t seen this kind of pressure since the bottom fell out of the market in 1998.

Smith says there is nothing producers can do to prevent another crash – especially if total number of pigs continues to increase, BUT producers are better prepared this time around.  “I think they’re smarter and better educated and they’re better marketers,” he says.  “We know that as well.  I think we’re probably seeing some hogs being pulled ahead here knowing that lower prices probably loom as far as cash hog prices as we enter that October/November time frame.”

AUDIO: Dennis Smith, Archer Financial Services

Canadian market analyst Keven Grier says despite the pressure on shackle space – as long as demand holds – he doesn’t anticipate a slow-down in processing through the end of the year.  “Domestic demand in North America has been pretty good; export demand has been good,” he says.  “I think as long as long as it stays that way – sure we’re going to be up against capacity for several weeks this fall – but as long as that product is moving because of good demand packers are going to work through that like a hot knife through butter because their margins are so good.”

Market prices are at some of the lowest producers have seen in the last decade and both analyst warn it could likely get worse.