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U.S. Seasonal Pork Price Indexes
U.S. pork production and pig prices vary in a predictable
manner during the calendar year. Such variation is
called seasonality or seasonal variation. The graph below
shows the seasonal indexes for both pork production
and market hog prices from 1980 through 2008.
An index shows the percent of the annual average that
prevails during a particular month. For example, this
graph shows a seasonal production index of 92 percent
and a seasonal price index of 110.0 percent for July. These
numbers mean that, on average, July pork production will
be about 94 percent of a year’s monthly average production,
while July pork prices will be about 110 percent of
the average annual price.
As “seasonal” implies, weather is a main driver of
pork production levels. When considering seasonal factors,
one must always consider biological time lags, such
as gestation period (about four months for pigs) and
feeding period (about six months for pigs).
Breeding performance is better in the cooler weather
of fall and winter. This results in more and larger litters
being farrowed in spring and early summer and more
pigs available for harvest the next fall and winter.
Conversely, higher temperatures cause poorer breeding
performance in the spring and summer, resulting in
fewer and smaller litters in the fall and winter and fewer
market hogs the following spring and summer.
Pig growth rates vary by season, as well, largely
because of variations in feed intake. Pigs eat less during
hot weather and thus grow slower. This pushes market
hogs out of summer months and into the fall. Higher
feed intake in cooler months causes pigs to perform
exceptionally well and pulls marketings forward in the
spring months. Both of these cause fewer pigs to reach
market weights during the summer.
Pig prices, quite logically, follow a seasonal pattern
opposite of what happens with pork production.
But there are seasonal components to pork and hog
demand as well.
Summer grilling season increases the demand
for loins, ribs, Boston butts and pork trimmings, a
major ingredient in hot dogs and other sausages. This
strength drives up pork and hog prices. Pork bellies,
the raw material from which bacon is made, once
contributed greatly to summer-demand strength due
to the availability of tomatoes and the popularity of
BLTs. Increased year-round use of bacon by foodservice
operations has removed much of the seasonal
variation in bacon use and belly prices.
Holiday demand for hams causes their prices to vary
“counter-seasonally” to hog prices with the year’s lowest
ham prices being in the summer and highest prices
usually occurring in October and November.
Seasonal Hog Supply and Price Indexes – 1980-2009
115.0
Percent of Annual Average
110.0
105.0
100.0
95.0
Pork Production
IA-S. MN Hog Price
90.0
J F M A M J J A S O N D
Source: Paragon Economics, Inc.
Stats
97