The latest Quarterly Hogs and Pigs report showed inventory of 74.2 million head, down four percent from the same time in 2020. Economist Dr. Steve Meyer with Partners for Production Agriculture says the report shows hog supplies will still be rebounding next year, and prices are good.
“I cannot get very close to them in my models based on fundamental supply and demand, so, I think they should be really being pretty aggressive about pricing animals, especially if they can execute a strategy that with call options or something that leaves the top side of this market open to them.”
Producers looking at marketing in the new year are wondering about consumer demand, as 2021 was a demand driven market. Get to where those futures prices are in the summer, we’ve got to have some strengthening of demand from where it is at the moment. I think it will bounce back some, I think we had some changes of habits and such during the COVID shutdowns that will benefit us in the long run, but that’s going to be the key on whether we can get these hogs up bumping $100 like the futures say right now.”
Export opportunities in 2022 will see growth in key areas NPB focuses on in their International Marketing Strategy.
“We think that exports are going to grow just a bit this year from last year’s level, but it’s going to be Mexico, Canada, the Philippines, South Korea, Japan, South American countries, it’s going to be those that drive the growth. We don’t think China’s going to be a factor in that at this point.”
Meyer says there is some optimism ahead and supplies will be larger in the second half of the year. With good prices on the board, that can lock in some decent profit margins, even with high cost of production. Producers can visit porkcheckoff.org for more market insight.