Hog prices ready for their spring rally but large supplies on the ground will help keep prices in check.
It’s no surprise that hog prices move higher into the summer. Hog slaughter seasonally declines and better demand for grilling items tends to support cutout values. So far this Spring, hog prices have been quite weak, a function of +7% slaughter, belly prices that have reverted to the mean, and a slowdown in export business. But as the chart below indicates, futures at this point expect hog values to really into the summer months, an expectation predicated on improving cutout value and lower product availability.
It does not hurt that the price of competing products: beef or chicken, have moved higher in recent weeks, making pork products appear particularly attractive going into the summer.