What's the recipe for higher hog prices? Strong exports and strong domestic demand, of course. Here's a look at what's happening in the hog markets, plus a cookout suggestion that's sure to keep domestic demand strong, IF enough of you like it.
What to watch
When talking with producers after the "shocker" June 30th USDA report, finger pointing and blame are usually the first topics of conversation.
"Why didn't the USDA get it right?" "What's going on with these estimates?"
There's quite a bit of emotion in these conversations. The first emotions are usually anger and denial.
When talking with producers about selling their crops over recent weeks, there is an overwhelming sense of apathy on the part of many. In my conversations with producers, I hear things like,
"Well, the fundamentals are still bullish, so it's not like we'll see $2.00 corn ever again."
"No one thinks the price will go down."
And my personal favorite, "I'm waiting for one more push higher…then I'll pull the trigger."
Cattle prices without a doubt have taken many aback by their resiliency to remain at such high values. As we all now, the herd is at its lowest level in decades, while domestic and international demand remain powerful forces. Seasonally, cattle prices push higher into March, then set back into April, and normally decline into early summer.
With the USDA Prospective Plantings report approaching at the end of the month, most analysts and farmers can't stop talking about how many acres the U.S. is going to plant and the role that mother nature will play in regards to yield. We need every bushel we can grow as last year total corn usage for the U.S. was 13.066 billion bushels. And, usage for the upcoming year is expected to be near 13.4 billion bushels.
Let's take a quick look at the past 5 years of planted corn acres:
Many are wondering when is the best time to price any remaining old crop.
The last five years have seen dramatic shifts in commodity price volatility. It's highly likely that this shift in volatility is here to stay for the foreseeable future. Agricultural commodity markets were relatively stable in the past, due to factors such as government programs, weak demand, favorable weather and high carryover stocks. In the past market environment, producers could successfully use simple crop marketing strategies because the market fundamentals were more stable and prices were less volatile.
Naomi Blohm takes a break from her regular marketing column to share tips for staying safe during the harvest.