unfortunate blow blow to American hog producers with her hurricanes in Florida, Texas and Puerto Rico and earth quakes in Mexico. It appears that perhaps 25 million U.S. citizens have been hurt by the storms. That is about 7.7% of our population. If pork demand is linear, that represents 7.7% of pork demand. If their demand for pork is reduced by 30%, there could be a 2.3% temporary drop-off in demand. Mexico is our largest export market. We could be looking at a temporary loss of demand in the range of 2.5% to 3.0%.

That's a big deal in an already over-supplied market.

If there are actually 350K hogs backed-up as suggested by the last H&P report, packers will be cutting their asking prices for the cutouts.

Fortunately the cold storage report Friday showed pork is down 5.0% from last year and bellies are down a whooping 40% so there is plenty of room for pork to go into cold storage which it did do last month in a big way. I suppose the low volume of pork in storage relative to last year could be mildly supportive of the VVVs this morning.

The next H&P report on Friday is coming at a very good time to help us understand the scope of the problem being faced by the hog market.

Best wishes,

dhm