Hogmageddon in the autumn?

The US hog price has behaved like the proverbial dead cat in the last few months. It was falling and then it bounced – and now it’s back on the floor, twitching. I fear this may portend a very weak global hog price in the autumn. Indeed, we may finally get “hogmageddon”. This contrasts with “hogheaven” throughout 2014 when prices reached record highs in North America. Have a look at the charts here to see what I mean. US daily hog prices are holding up for the moment and are (just about) holding to a normal seasonal pattern that is exemplified by the 2013 price series. But there is a lot of pork in the pipeline. Packers could be seeing some very low raw material prices this autumn and consumers could get a bonanza in the supermarket meat aisles (if retailers pass the price falls on to them).Seasonal us prices

I have described what I think may be happening in more detail in the July issue of Whole Hog Brief but you can see from the long run chart of global pig prices that we are overdue for a downturn. It’s now headline news that car workers in China are on short time, the global market for iron ore and other hard commodities has collapsed, the Australian (commodity driven) economy looks sick and Chinese consumers are not spending – not to mention the Alice in Wonderland story that has the Chinese government underwriting the Shanghai stock exchange.  It’s your choice on who gets the part of the Mad Hatter.Seasonal us prices V2

This last paragraph would not matter except that almost all of the western-based pork export supply chain (and, indeed, western manufacturing industry in general) is looking at China and Asia to, literally, save their bacon (well, buy it- along with cars, iPhones, Coca Cola, etc, etc). But if the global economy, especially China, is faltering there may not be the demand (or money) in China for all that extra pork that is in the pipeline. And that’s without any contribution from the modernizing Chinese pig sector.

So, hogmageddon may be the in-word this autumn:  you heard it here first.