Cattle, hogs respond differently to unseasonal weather

Hogs: The issue hitting hog prices right now is not the same as in cattle. On the beef end, where cattle are grown outside, warmer temps will help weight gains. For hogs, where 98% to 99% of production is completed in temperature-controlled buildings, we should not see much change in finishing weights. Kill levels are outstripping what would be implied from the December Hogs & Pigs report. The trade has had to scale back price levels as a result. Until this supply surprise changes, bears are running the show...Rich Nelson

Cattle: Chicago-based traders are currently seeing fall-like temperatures that are 25 degrees over normal. While warmer than normal temperatures are relatively new for our friends in Kansas, at only two weeks now, it has been an issue for Nebraska for a full month. Our statistics show warm temperatures, and the resulting weight gains, can swing beef production by as much as 2.5%. Will the slightly cooler temps forecast ahead change anyone’s mind?…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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