U.S. producers of beef, pork, chicken, and turkey may produce over 100 billion pounds of meat this year, a record that is causing a stomachache for markets.
Most U.S. livestock is fed a diet that is heavy in corn and soybeans, and low grain prices over the past few years allowed for rapid expansion of herds and flocks. Much of this expanded meat supply was intended for export markets, but recent trade disputes have cut off foreign demand, leaving the producers with nowhere to sell their extra supply.
Hardest hit was the hog market, as China and Mexico, the two largest buyers of U.S. pork, have both implemented tariffs against U.S. meat. These retaliatory tariffs sent hogs below 50 cents per pound, a devastatingly low price for hog farmers.
Meanwhile, the glut of meat should lead to bargain prices at the grocery for meat lovers.
This week, rumors circulated that Mexico may be close to a deal with the United States on trade, which briefly sent pigs flying higher by over 6 cents per pound (+13%) in just two days, showing how volatile the markets can be.