Hog futures fell the most in two years on signs that consumers are scaling back on pork purchases after prices for the meat reached all-time highs.
Wholesale pork fell 17 percent since reaching a record $1.3756 a pound on July 18 as consumers shifted to cheaper poultry for grilling, David Kruse, the president of Royal, Iowa- based CommStock Investments Inc., said in a telephone interview.
Hog futures in 2014 soared as much as 56 percent to an all- time high in March as the porcine epidemic diarrhea virus killed as many as 8 million piglets. Prices are down 29 percent since June 30, the biggest loss among the 22 raw materials tracked by the Bloomberg Commodity Index. The declines came as slaughter rates and animal weights increased, while the spread of the disease slowed.
"Consumers have proven to have less interest in pork at record prices," Kruse said. "Prices have to fall to the point that increases both retailer and consumer interest in buying pork again. We are not there yet."
Hog futures for October delivery fell by the 3-cent limit, or 3.1 percent, to 94.4 cents a pound at 12:34 p.m. on the Chicago Mercantile Exchange, heading for the biggest drop since Aug. 22, 2012. The commodity reached a record $1.33425 on March 18.
Falling prices signal reduced costs for companies that slaughter animals including Tyson Foods Inc. and Cargill Inc. The U.S. Department of Agriculture said Aug. 12 that per-capita pork consumption will decline this year, as poultry rises.
In the week through yesterday, hog slaughter rose 4.3 percent from a week earlier to 1.191 million head. Carcasses averaged 215.32 pounds (97.7 kilograms) yesterday, up 5.4 percent from a year earlier, government data show.
The USDA expects that pork production will be down 1.8 percent in 2014 from last year and will rebound 2.2 percent in 2015.