Cash and futures hog prices have been on a roller coaster
lately and a livestock economist says that volatility is likely to continue.
University of Missouri’s Scott Brown says the recent rally
has been based all on demand. “It
certainly hasn’t come from the supply side,” he says. “Because we’re going to continue to talk
about growth in production.”
He tells Brownfield the reports that China hasn’t been able
to control the spread of African Swine Fever has been a huge factor in the recent
rise in hog prices. “I think US markets
are looking forward to the opportunity to move more product to China,” he
says. “And that’s where we’re going to
get this on-again/off-again. If we get information
that maybe the disease isn’t as bad we’ll get prices moving down, if we get
more information that African Swine Fever is worse – we’ll see prices move
higher.”
But, Brown says the total losses in China are still unknown
and the lack of information adds to the volatility to the market. He says
the trend of prices moving sharply higher one week and moving lower the next
will likely continue for the foreseeable future.
Continue reading Hog producers should prepare for more volatility at Brownfield Ag News.
