Inside Pigs
US pig price explodes to highest level in 7 years
A shrinking livestock population will reduce the supply of pigs in 2021, according to data from the United States Department of Agriculture (USDA). The small supply affects strong national and international demand. Pig prices in the United States have recently risen to the highest levels in at least 7 years.
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According to the most recent data (March 1 count) from the USDA, the total pig herd in the United States was 2% smaller than on March 1, 2020. The number of sows even fell by 3% to 6.210.000. That is 160.000 fewer than a year earlier.
Production further reduced
American pig farmers have also indicated that a further decline in the livestock population is expected in the coming months. For the period March-May, pig farmers expect to produce 2% fewer piglets than a year earlier. In the following period June-August, production is expected to decline by as much as 4 percent. The reduced production may partly be related to regionally flaring animal diseases such as porcine reproductive and respiratory syndrome (PRRS) and swine flu. These two viral diseases are currently causing problems at some companies, because savings were made on vaccination during the bad economic year of 2020.
Strong question
At the same time as the problems surrounding production, demand for pork is strong. The prospects are also good now that it appears that measures to prevent the spread of corona can be slowly phased out. In the United States, the number of infections has fallen significantly compared to January. Nearly 30% of the population has also already been vaccinated (at least 1 injection). Further relaxations therefore appear to be in the offing. This could further strengthen the demand for pork in the coming period, especially because the summer period is just around the corner. Traditionally, pork consumption is always higher. Export demand also remains strong, just like last year.
Exploding prices
Due to all developments, prices for pigs have risen in a short time to the highest level in at least 7 years. The average price for hogs delivered last week (ending March 31) was about $1,90 per pound of carcass weight, USDA data shows. At the beginning of February, this price was still around $1,15 per kilo of slaughtered weight. Futures contracts pay more than $2 per kilo for the months April to August.