Hogs: The pork production picture is not a bullish situation -- by itself. The USDA suggests pork production will grow by 1.7% next year due to efficiency gains. Allendale’s latest projections agree with that message with our 1.3% gain expected. After accounting for better exports next year, USDA suggests pork left for US consumers will grow by 0.7%. Normally, more supply means lower prices. That will not be the case next year…Rich Nelson
Cattle: If you have any doubts as to why these livestock markets are seemingly reaching for the clouds in pricing recent fundamental data should answer your questions. In almost every month since USDA started making 2012 meat projections, they have tightened supply. Per capita supply takes production, adjusts for changes in imports, exports, and stocks and divides by population. This is the measure of supply that meat analysts begin making price projections. The total amount of meat that the US consumer will see next year will be the lowest since 1984!...Rich Nelson
Rich Nelson is Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.