Market Overview: Lean Hogs (LH)

The U.S. is the world's largest pork exporter with Japan, Russia, Canada and Mexico generally the largest importers of U.S. pork. The U.S. Imports pork products, mostly from Canada and Denmark, the total of which is generally less than one billion pounds. The U.S. also imports live hogs from Canada.

Seasonal Overview:

The supply and demand factors affecting the price of Lean Hogs are relatively constant each year. January normally marks one of the lowest numbers of pig farrowings (births) of the year. As a result, the price of Lean Hogs tends to be strong in January because of the limited number of hogs. March through May historically have the largest numbers of pig farrowings. As a result, February usually has large numbers of Hog slaughters as farmers raise cash to purchase feed for the next round of fattening. Due to the typically large number of hog slaughters in February prices tend to decline during the month of February. March through May tend to be strong periods for Lean Hogs because it typically takes five to seven months to bring the recently born hogs to market. June, July, and August also is the height of the barbecue season, when the US population tends to consume more meat products than other times of the year, which tends to offset some of the weakness associated with the spring farrowed hogs being brought to market. August through December are characterized by increasing supply and slowing demand, which results in weaker prices for Lean Hogs.

Lean Hogs: (High: May-Jul//Low: Feb-Mar or Aug-Sep) Slaughter lowest, reproductive activity and weight gain slowest during heat of June-August, with slaughter heavy in fall/spring. Slaughter patterns usually built into price structure, with June and July contracts priced high whereas April and October already reflect seasonal weakness.

Chart courtesy of Moore Research Center, Inc.