This week’s bearish news on the lean hog futures shocked many market participants, particularly after last month’s bullish inventory numbers. December lean hog futures were trading in the mid-70s as the week rounded out, down about $13/cwt or 15% since September 20. The reason for the sudden drop is up for speculation, though many cite bearish views on demand or risks tied to a worsening economic outlook. But numbers last year around this time experienced a similar drop, due to price adjustments after kill numbers rise above a certain level.

This year though, four factors mark the current market climate difference from a year ago. First, fewer hogs will be going to market than last year, and the average weight of producer-owned hogs is behind last year’s levels. Another reason is belly prices were high in October 2021, negatively impacting sales for the remainder of the year. Lastly, consumers are trading down in protein choices, selecting less-expensive pork items.

Read more on the sudden drop in lean hog futures here.