Where Will Finished Product Go As New Pork Plants Change Supply?

September 12, 2017 10:48 AM

New pork processing plants in Coldwater, Mich. and Sioux City, Ia. is changing the supply side of the hog market.

It seems something has to give in terms of demand to offset higher production. Don Roose, founder of U.S. Commodities, Inc., says producers have been in a supply bear market, similar to what producers faced in 2016.

“By the third quarter, we’re going to have supplies up 2 percent over one year ago,” he said. “The fourth quarter, we’re going to be up 4 percent over a year ago.”

He says while the first quarter of 2018 will see a 1 percent increase, the big growth will come in the second quarter of 2018 with a growth of 7 percent.

With the two plants coming online the beginning of September which will eventually process 20,000 hogs each day, Roose says it’s exactly what is needed in terms of competition.

The next big question Roose and other analysts are wrestling with is if there will be demand for the finished product.

Hear his thoughts on where the demand needs to come from and his advice for pork producers looking to price on AgDay above.

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