U.S. pork production and pig prices vary in a predictable manner during the calendar year. Such variation is called seasonality or seasonal variation. The graph shows the seasonal indexes for pork production and market hog prices from 1980 through 2015.
An index shows the percent of the annual average that prevails during a particular month. For example, July’s seasonal production index of 91.4 percent and seasonal price index of 110.8 percent mean that, on average, July pork production will be about 91.4 percent of a year’s monthly average production and that July pork prices are usually about 110.8 percent of the average annual price.
Weather is a main driver of pork production levels. Also, biological time lags (gestation period of about four months and a birth-to-market feeding period of about six months) must be considered.
Breeding performance is better in cooler fall and winter weather. This results in more and larger litters farrowed (born) in the spring and early summer and, subsequently, more pigs available for harvest the next fall and winter. Conversely, higher temperatures cause poorer breeding performance in the spring and summer, resulting in fewer and smaller litters in the fall and winter and fewer market hogs the following spring and summer.
Pig growth rates also vary by season largely because of feed intake variations. Pigs eat less during hot weather and grow slower, pushing marketings of some finished hogs from summer into the fall. Higher feed intake in cooler months causes pigs to perform exceptionally well, pulling marketings forward in the spring. Both of these factors cause fewer pigs to reach market weights during the summer.
Pig prices follow a seasonal pattern opposite of what happens with pork production, but there also are seasonal components to pork and hog demand. Summer grilling season increases the demand for some cuts and helps strengthen already strong summer prices. Consumer-level pork demand actually peaks in the fall months, keeping large hog and pork supplies from having an even larger negative impact on hog prices.
Pork bellies, the raw material for bacon, once contributed greatly to summer-demand strength with the popularity of BLT (bacon, lettuce and tomato) sandwiches. However, increased year-round use of bacon by foodservice operations has removed much of the seasonal variation in bacon use and belly prices.
Holiday ham demand causes ham prices to vary the opposite, or counter-seasonally, to hog prices. The lowest ham prices usually are in the summer and the highest prices in September and October when fresh hams are purchased in preparation to sale for Thanksgiving and Christmas.