U.S. hog prices are the lowest in six years, with the swift drop in market prices following the rating by the WHO’s cancer research agency of processed meats such as bacon and ham as “carcinogenic to humans,” says Purdue economist Chris Hurt. Prices for slaughter hogs were 52 cents per pound before the Oct. 26 announcement and, four weeks later, they are around 38 cents, writes Hurt at farmdoc daily. “Over this short period, wholesale prices for hams fell 6 percent, loins were down 12 percent and the wholesale bacon price is down 32 percent.”
Futures prices have begun to recover from a similar decline, says Hurt, which suggests the long-term impact of the WHO rating will be less profound than the short-term response. All the same, hog farmers are likely to lose money on average this year and in 2016 because of growing supplies of pork, beef and chicken. “There certainly is a reasonable probability that hog prices have been excessively depressed after the WHO announcement. If prices can continue to recover in coming months, this could narrow the current expected losses for next year,” said Hurt.