The USDA’s Quarterly Hogs and Pigs report in late-June was somewhat surprising, indicating that no expansion was taking place despite this being one of the profitable periods in the U.S. pork industry. In the latest World Agricultural Supply and Demand Estimates (WASDE) report, the USDA suggests these strong hog prices coupled with lower feed costs are providing incentives to feed hogs to heavier weights.
In Friday’s WASDE report, the USDA reiterated its Hogs and Pigs report by lowering projected pork production in 2014 on “slower-than-expected expansion in farrowings during the second quarter.”
Pork production in 2015 was also forecast lower as “supplies of market hogs will remain relatively tight.”
Hog prices for both 2014 and 2015 were raised on continued strong demand and expectations of tighter supplies in 2015. Despite high prices, pork exports remain robust and forecasts for both 2014 and 2015 are raised.
The USDA also showed lower feed costs, with both corn and soybean prices reduced from last month’s report. Season-average corn prices are expected to range between $3.65 and $4.35 per bushel, down 20 cents. The season-average soybean price is expected to range between $9.50 and $11.50 per bushel.