Economic Value Study for 2022 Hog Futures – 11/11/21

The USDA forecast the domestic per capita pork supply in 2022 at 49.9 pounds compared to the 50.7 pound estimate for 2021. High grain prices could stall an upturn in the hog cycle for the next calendar year. The December Hogs and Pigs report, scheduled for  release  on December 23,2021 will provide fresh information on hog producers future plans.

We have scattered the annual average Deliverable hog price as a function of the per  capita domestic pork supply as published by USDA.  Note that the current futures average (green point) is on the high side of historical experience. The 2021 experience was shifted by large purchases of US pork by China which is unlikely to be repeated in 2022. But traders may keep deliverable hogs  bid up to compensate for high feed costs.