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Typical slide for meat market

Agriculture.com Staff 10/08/2007 @ 7:57am

The decline in both the hog and cattle prices this week was disappointing for producers but not a significant surprise. Overall, the markets are experiencing ample inventory of all meat available to the market. In turn, this is keeping pressure on prices.

Cattle futures have remained in a long term uptrend but were due for a setback. Futures slid significantly this week, but the overall trend still remains higher. Tighter inventories and higher priced inputs have helped keep the cattle producers current this year and will likely help provide underlying support in the year ahead. For now, however, between the combination of increased poultry, pork and beef, as well as ideal weight gaining weather, the market will remain under pressure for the near term.

Hog futures have made a significant slide after rallying into mid summer on export talk, as futures have dropped well over 30%. Since peaking, the reality of growing inventories, especially into the fall months, has pressured prices.

Technicals took a very negative turn when prices pushed below the critical 50 and 100-day moving averages in late August. In the long run, lower prices should lead to better demand, especially from the export front. Although it is not likely the hog industry will contract any time soon, it is, however, likely that expansion will be limited, especially if corn prices rally this winter.

Fall has a long history of being less than kind to pork and beef prices. However, on a positive note, a rebound late in the year usually follows.

If you have any questions or comments, please contact Bryan Doherty at Top Farmer: 1-800-TOP-FARM.

The decline in both the hog and cattle prices this week was disappointing for producers but not a significant surprise. Overall, the markets are experiencing ample inventory of all meat available to the market. In turn, this is keeping pressure on prices.

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