In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
Friday’s quarterly USDA Hogs and Pigs report, which indicated a better-than-expected supply, should be bearish for prices.
Over the past month, traders had bid up hog futures — from mid-$80s per cwt in late August to $92.93 on Sept. 27 — on the theory that there might be a supply gap in the wake of this summer’s outbreak of porcine epidemic diarrhea virus (PEDv). Supporting that idea, hog slaughter for the first three weeks of September was 8.3 percent below a year ago and 4.5 percent below the five-year average.
However, the Hogs and Pigs report pegged the June-August pig crop at 20.2 million head, an increase of 2 percent from a year ago. Furthermore, a 2-percent increase in June-August litter rate to a record-high 10.33 pigs per litter showed that PEDv, which is devastating to piglets, had much less of an impact than expected.
The 20-to-23-pound ham market, at $0.88 per pound, has been steadily in the $0.86–0.92 range since mid August. Prices look to be just a few cents higher in October ahead of Thanksgiving.
Contact John T. Barone at [email protected].