Hog Prices Stampede Higher

Hog prices ran to new highs this week as ongoing concerns about African Swine Fever (ASF) sparked buying. ASF is continuing to expand across China, raising concerns that millions of hogs may need to be slaughtered to stem the spread of the disease. Meanwhile, 15 cases have been found in wild boar in Belgium, prompting other nations to stop buying their pork due to the outbreak.

These actions could prompt more demand for U.S. pork, which helped spur a rally to 63 cents per pound, near a two-month high.

Despite the recent price jumps, the longer-term fundamentals of the markets seem bearish. Frozen inventories of pork are up by over 6% over the last year, while nationwide cattle and hog herds are expanding, indicating that future supplies of animals and meat should be even higher.