000831 Lean Hog and other Livestock Prices Sink

Lean hog prices dropped sharply on the Chicago Mercantile Exchange, falling to the lowest level of the year, which has been marked by soaring pork production.

Other livestock commodities also closed lower.

Although pork production rose to its highest level in two decades in April, demand has been waning lately. On Tuesday, hog prices for October delivery dropped 1.55 cents to 55.20 cents a pound.

Analysts said the drop in prices resulted from an adequate supply of hogs and little demand for pork on the wholesale market.

Despite a cutback on slaughter levels late last week in an effort to shore up product prices, wholesale pork trade continued to lack enthusiasm. But the supply still is more than the demand.

“Some people feel that the total meat market is so well supplied now that as pork supplies also increase in coming weeks, the outlook for products may not be strong enough to sustain its prices,” said Charles Levitt, a senior meat analyst with Alaron Trading Corp.

Usually, pork products are the first to slow down in competition with other meats, said Don Roose, president of Des Moines, Iowa-based U.S. Commodities Inc. Roose also pointed to recent poor movement of pork bellies out of storage.

“We're not consuming as much bacon as we used to,” Roose said. “Cold storage movement shows there has just not been the demand.”

February pork bellies dropped 2.45 cents to 68.15 cents a pound.

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