Cattle, hogs face different supply situations in 2012

Hogs: It is true that pork supplies will increase next year. Allendale’s pork production estimate suggests a 1.5% increase. However, the price impact will not be that bad. Between good exports, and a slight increase in population, the U.S. consumer will not see that much of an increase. USDA estimates a very moderate 0.6% increase on a per-person basis. Combined with the tighter supply of chicken and beef, 2012 should still be a winner for meat prices...Rich Nelson

Cattle: As we head into 2012, we must keep in mind pricing will be made with the idea that supplies will be restrained. We have low calf/feeder supplies which will reduce second half live cattle supplies. Now we have potential snow damage affecting first half live cattle supplies. In both 2010 and 2011 both cattle and beef prices rallied on resurgent demand and ideas that long term supplies were dropping. The live animal level saw the biggest gain. We expect the same in 2012. In the coming months we expect live cattle prices to lead and for wholesale beef to follow…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.

About the Author
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.

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