Grilling, scarce supplies push up US hog, pork prices
By Theopolis Waters
CHICAGO June 13 (Reuters) - U.S. hog and wholesale pork prices on Thursday surged to their highest in nearly two years as supermarkets fill meat cases with pork chops and ribs for summertime grilling and promotions for U.S. July Fourth holiday celebrations, analysts said.
Hogs were already hard to come by after last summer's historic drought hurt crops, drove up feed-grain costs, and caused hog producers to shrink herds.
"Tighter-than-expected hog supplies have packers, until they can cut kills to offset tighter numbers, behind the eight ball and scrambling to fill kill schedules," Linn Group analyst John Ginzel said.
That demand has pushed up hog prices. Government data showed the average hog price on Thursday afternoon in the Iowa/Minnesota market, the largest U.S. hog market, at $103.31 per 100 lbs (cwt), the highest since $104.53 on August 15, 2011.
The wholesale pork price on Wednesday, or cutout in industry parlance, was at $101.33 per cwt before easing on Thursday, according to the U.S. Department of Agriculture.
Wednesday's pork price is the highest since the government began its mandatory pricing report in January. Using USDA voluntary pork prices, which were replaced by the mandatory report, Wednesday's wholesale price was the most since $101.79 on August 26, 2011.
Pork demand got a shot in the arm by shoppers switching from high-priced beef. Beef prices have soared in reaction to less production as drought reduced the cattle herd to its smallest in 61 years. Wholesale beef was a record high $211.37 per cwt before the U.S. Memorial Day holiday. Prices have since slipped but remain at historical highs.
"Beef prices have since come down after blasting through the $200 resistance level in May, but still remain too high relative to pork and chicken," Ginzel said. Continued...