U.S. hog prices down as China quashes African swine fever

Though beef prices have soared in recent months, pork prices are down because of China's cooling interest in hog exports.

"Prices for hogs in the U.S. are tumbling in the wake of China’s announcement that the country’s herds have recovered from the African swine fever," Kirk Maltais reports for The Wall Street Journal. "Through last week, the most-active hog futures contract trading on the Chicago Mercantile Exchange has fallen nearly 17 percent, bringing the price down to 99 cents a pound—the first time it has fallen under a dollar since March. Futures posted a slight rebound Monday, rising 3% to $1.03 a pound. U.S. prices for pork cutouts—parts of the pig such as loin or ribs—have posted a steep dive in recent weeks. Loin prices have fallen 15% in the past 10 days, while ribs have declined more than 31%. Pork butt—commonly used for pork barbecue—has declined 14%, while pork bellies, used to make bacon, have dropped 18% in that time."

A 2018 outbreak of African swine fever forced China to cull about 40% of its hog population. "The nation’s agricultural ministry now says that its hog herd is back to more than 98% of its pre-disease levels—which was roughly 420 million head," Maltais reports. "The recovery comes well ahead of schedule, as China wasn’t projected to complete this rebuild until 2023." U.S. pork exports to China are expected to sharply decrease in the second half of 2021. Some analysts expect the trend to drag down demand of U.S. grains, as hog producers use less feed.