Hog prices are impacted by the supply of competing meats. USDA’s December forecast was for chicken production to be up 3.0 percent and turkey production up 1.4 percent in 2014. USDA expects beef production to be down 5.7 percent.
The total supply of competing meats is forecast to be down 0.4 percent from 2013, which should be positive for pork demand. In addition, Canadian hog production is declining, as is the number of live hogs being sent to the United States. In 2007, 10 million hogs were imported from Canada. Fewer than five million live hogs are expected to be imported in 2014. Most of the Canadian hogs coming south are weaner/feeder pigs.
Preliminary data on hog slaughter and prices in 2013 along with my forecast for 2014 are below. Because of uncertainty surrounding PED, I do not have a high level of confidence in my forecast. I am assuming that PED will reduce 2014 hog slaughter by 1-2 percent compared to what would have been, had the disease not found its way to America. Given an expected 0.3 percent decrease in 2014 hog slaughter but with weights about one pound heavier than in 2013, I expect 2014 pork production to be up 0.3 percent and hog prices to average close to 2013 prices.