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Economist says ASF means added volatility in hog prices

A livestock economist says China will continue to feed volatility into the pork market.

University of Missouri’s Scott Brown says he expects there will some weeks where news about China will drive prices higher and others were the market corrects itself and takes a step back.  “Producers want to be paying attention to that,” he says.  “When do they want to let someone else have some of that risk as we’ve gotten some recovery in pork prices?  It might be important because we’re still going to talk about larger runs of hogs this year.”

And with pork producers facing a break-even year – Brown says keeping options open could be the difference between a break-even year and a profitable one.  “If the Chinese get in our market more and purchase more pork products, you and I both know where hog prices will go because of that,” he says.  “If the Chinese say ‘this is a bigger deal than we first though’ than you could continue to see some pretty strong hog prices.”

The USDA estimates that by the end of 2019, China’s total swine inventory will be down 13 percent and the country’s total pork production will drop by 5 percent. 

AUDIO: Scott Brown, livestock economist, MU