Pork futures down 30% as flu cuts imports
- Source: Global Times
- [00:03 August 18 2009]
- Comments
Hog futures, the second-worst commodity investment of 2009, may fall 33 percent by year end from Friday’s 44.65 cents a pound.
After falling last week to the lowest price since November 2002, hog futures may average 30 cents to 32 cents a pound on the Chicago Mercantile Exchange in November because of unwanted supply, said Glenn Grimes, a livestock economist at the University of Columbia at Missouri.
US exports plunged 20 percent in the first half of the year and are heading for the first annual decline since 1990 after the A (H1N1) virus outbreak in April led to import restrictions by major importers.
The flu will contribute to an 11 percent drop in the global pork trade in 2009, the UN said.
Slumping exports, the global recession and improvements in breeding methods left US inventories in June at a record high level for the month.
Farmers are losing $30 to $35 on every pig they sell this month and may not make money until May, Grimes said.
Producers have been unprofitable for 20 of the 22 months through July, and more than 5,000 of them may need to exit the business, he said.
Hog prices may continue to drop as world demand may not recover soon, said Guo Huiyong, an analyst at Beijing Orient Agribusiness Consultants, “The (China’s) domestic market has a supply glut and the prices have slumped.”
However, consumers may lead a rebound by taking advantage of the lowest wholesale prices since January 2003, said John Lawrence, a livestock economist at Iowa State University in Ames.
