Hog futures fell, capping the longest run of weekly declines in 17 months, on speculation that a deadly virus that boosted U.S. pork costs killed fewer pigs than estimated.
The price decline to a five-month low indicates lower costs for bacon and pork chops, which climbed to records this year. Hog futures in 2014 soared as much as 56 percent to an all-time high in March.
Futures dropped for the fifth straight week and have slumped 26 percent from the record $1.33425 a pound on March 18. The spread of the porcine epidemic diarrhea virus may have killed as many as 8 million piglets. Analysts including Paul Beere of Prime Ag Consultants say the slaughter shortfall in August from a year earlier will be about half of estimates.
“More hogs than were previously expected were showing up at market,” Dan Vaught, an economist at Doane Advisory Services in St. Louis, said in a telephone interview. “At this point, the industry is pretty firmly convinced there’s never going to be another good day in the hog market.”
Hog futures for October settlement declined 0.9 percent to close at 99.325 cents at 1:12 p.m. on the Chicago Mercantile Exchange. Earlier, the price touched 97.5 cents, the lowest for a most-active contract since Feb 20.
Pork supplies will jump as the spring crop of pigs, typically the largest of the year, hit the market, Vaught said.
In July, 332 cases of PED were reported, the fewest since October and down from the peak of 1,228 in February, data published by the U.S. Department of Agriculture on July 31 show. More than 7,800 cases were reported since the outbreak began in 2013 and spread to 30 states.
The end of U.S. summer-grilling season will probably reduce demand for meat. Retail pork chops climbed to a record $4.106 a pound in May and dropped to $4.024 the following month, government data show. Bacon climbed to an all-time high of $6.106 in June, the latest figures show.
Wholesale pork headed for the third straight weekly decline. On Aug. 6, the price touched $1.2631 a pound, the lowest since June 18, USDA data showed.
Cattle futures for October delivery tumbled by the exchange limit of 3 cents to $1.50 a pound, the lowest since July 11. The drop of 2 percent was the biggest since Sept. 25, 2012.
Feeder-cattle futures for September settlement fell by the maximum of 3 cents to $2.14725 a pound. The 1.4 percent drop was the largest since July 10.