The price of U.S. hog futures relative to cattle has tumbled to its lowest in nearly nine years as the worst drought in half a century lifted grain prices to record levels and increased herd liquidation.
The lower price for pork could encourage more consumption of pork and less of beef, at least in the near term, analysts said.
The difference in price could widen further this fall when hogs gain weight as cooler weather allows for a greater conversion of feed into body weight, the analysts said.
"There has been a ramp up in pork production," said Jim Robb, director of the Denver, Colorado-based Livestock Marketing Information Center (LMIC), which provides economic analyses and market projections to members that include government agencies.
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