Pork stocks in U.S. warehouses in September soared to a record high for that month, a sign the rush to market hogs this summer due to high feed costs may mean fewer hogs and less pork next year.
The bulk of the price gains could come in the second half of next year, analysts said.
“We slaughtered lots of hogs during September, far more than expected, with a good chunk ending up in cold storage,” said University of Missouri economist Ron Plain.
The USDA estimates end-of-September pork stocks at 630.7 million pounds, up eight per cent from August and up 28 per cent from last year. It was the fifth straight monthly record.
Leading the way was the tally for hams at 213.9 million pounds, an all-time high for any month. Pork bellies also jumped 79 per cent from a year earlier to 16.9 million pounds.
More hams landed in cold storage facilities for the upcoming holidays. And some were concerned that high prices for bacon last summer slowed demand for product, backing bellies up in storage.
Fewer hogs, less pork
“Retail pork prices will begin to move up modestly through next April or May, and a rapid increase in the last half of 2013, due to the reduction in the breeding herd,” said University of Purdue livestock economist Chris Hurt.
He sees retail prices for pork to remain steady to higher into the end of the year.
The retail pork price in September was $3.50 per pound, compared with $3.52 in August and $3.56 a year earlier.
Pork prices have come down, but not as much as some had anticipated given the glut of supplies.
“It’s the in-between costs, getting product from the farm gate to the dinner plate, that adds up and generally doesn’t go down, but goes up over time,” said independent market analyst Bob Brown.
He said any subsequent retail pork price increases may be more associated with continually rising marketing costs — everything from transportation to packaging of the product — and less so because of eventual tighter hog numbers.
Linn Group analyst John Ginzel said pork was heavily featured in grocery stores when prices declined in the middle of September through October, the latter being National Pork Month. That will begin to wind down soon, he said.