DES MOINES, Iowa — Three livestock market analysts offered their thoughts and price predictions for the U.S. hog market over the rest of 2019.
The analysts spoke after the release of the second quarter U.S. Department of Agriculture hogs and pigs report, in a call sponsored by the National Pork Board and Pork Checkoff.
All of the experts said that U.S. pork exports should see sizeable increases for 2019, due to the ongoing African swine fever epidemic among the hog herd in China.
Kevin Grier, president
Grier said he expects a boost in exports, as well as premiums due to pork scarcity with the ongoing ASF situation in China, to fuel prices.
“I have exports in the next four quarters up by 25% to 30%. That sounds like a lot. Exports have been 20% to 25% of U.S. production and my forecasts of 25% growth really only amount to 25% to 30% of U.S. production,” Grier said.
His price predictions, using Lean Hog Basis, price per hundredweight:
- Second quarter — $88.
- Third quarter — $98-$100.
- Fourth quarter — $88.
Kevin Bos, president
Bos, too, has a positive outlook when it comes to U.S. pork exports going forward. He said he believes wholesale demand will drive prices but only at the front end of the next few months, not through the rest of the year.
“I have some pretty generous export projections included in the price forecasts, a 10% year-over-year increase in total pork exports in the second quarter and then a 31% increase in total U.S. pork exports in the third and fourth quarters,” Bos said.
His price predictions, using CME Lean Hog Index, price per hundredweight:
- Second quarter — $81.
- Third quarter — $82.
- Fourth quarter — $70.
John Nalivka, president
Nalivka is optimistic on exports — but says packer margins need to be considered.
“I am quite optimistic on that myself but there is a limit to how high you can run these prices and still maintain a margin at the packer level. We are already going to cut the packer margin this year by a third of what it was last year. Instead of a $25 packer margin, we’ll end up with a $15 packer margin,” Nalivka said.
His price predictions, using the Western Corn Belt Weighted Average Price, price per hundredweight:
- Second quarter — low to mid $60s.
- Third quarter — low to mid $70s.
- Fourth quarter — low $60s.