In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
The drop in feed prices has not yet allowed farmers to produce more pigs, but it has allowed them to fatten up the ones they already have. Hog weights in November were running 2–3 percent above a year ago. The increase in weights will help offset the fact that more sows are being held back from slaughter for breeding.
The increase will also help offset the decline in supplies expected this winter due to pigs lost to the porcine epidemic diarrhea virus (PEDv). In November, the USDA cited PEDv in reducing its estimate for 2014 pork output from 24.1 billion pounds to 23.7 billion pounds, but that’s still 2.6 percent above 2013 levels.
With Thanksgiving sales and promotions in the rearview mirror, hog futures prices have dropped from $91.95 per hundredweight in late October to $81.68 per hundredweight on Dec. 6. Pork prices look to be tame through winter before rising again seasonally in early spring. The USDA is projecting 2014 hog prices to be 7.4 percent below 2013 levels.
Contact John T. Barone at email@example.com.