High Hog Supplies and Uncertain Chinese Trade Add Volatility to Hog Markets

Aug 19, 2019

HAMS Marketing Services says the trade situation with China continues to add a higher level of uncertainty to an already volatile North American hog market.

Live hog prices have remained extremely volatile throughout 2019.

Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says as the result of large U.S. hog supplies and increasing production, the value of any hogs not under contract is dropping rapidly but, on the pork side, the past two weeks or so have seen added support.

Clip-Tyler Fulton-HAMS Marketing Services:

That's led to a divergence in cash hog pricing because some producers are referencing that pork price that packers are selling for while others that don't have a secured contract, those values are dropping very sharply.

There's a great deal of uncertainty and it's a unique circumstance to see these markets moving in opposite directions.

I would say that most traders would view the Chinese situation as being the only way to avoid really significant losses in pig prices because of the abundant supply of hogs, particularly in the United States.

With these barriers to being able to capture those opportunities in China that relate to the losses due to African Swine Fever, we find ourselves in a position where we know fundamentally that there's opportunities there.

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Video: What Does 20 MILLION Hogs a Year Look Like?

?? The Multi-Plant System Processing 20 Million Hogs Annually in the Midwest JBS USA operates multiple large-scale pork processing facilities across the Midwest, including major plants in Iowa, Minnesota, and Indiana. Combined, these facilities have the capacity to process approximately 20 million hogs annually.

Each plant operates high-speed automated slaughter systems capable of processing up to 20,000 head per day, followed by fabrication lines that break carcasses into primals, sub-primals, and case-ready retail products.

Hog procurement is coordinated through electronic marketing platforms that connect regional contract finishing operations and independent producers to plant demand schedules. This digital procurement system allows for steady supply flow and scheduling efficiency across multiple facilities.

Processing plants incorporate comprehensive food safety systems, including pathogen intervention technologies, rapid chilling processes, and integrated cold-chain management. USDA inspection is embedded throughout the harvest and fabrication stages to ensure regulatory compliance and product integrity. Finished pork products — from bulk primals to retail-ready packaged cuts — are distributed through coordinated logistics networks serving domestic and export markets.