After a brief rally, hog prices ended on the chopping block again, falling to a 20-month low near 50 cents per pound.
Prices are tumbling as U.S. trade delegations have failed to make headway with China and Mexico, the two largest buyers of U.S. pork. Earlier this year, both nations imposed tariffs against U.S. goods in response to a series of tariffs levied by President Trump.
Without the renewal of foreign demand, U.S. pork is likely to remain cheap and domestic inventories could swell. Most drastically, pork belly stockpiles, from which bacon is made, more than doubled since last year, signaling that bacon lovers should be able to indulge to their heart’s delight.
**Corn Sags to New Low
Corn prices dropped under $3.50 per bushel on Friday, the lowest level in over a month. Corn slid as a national crop tour projected a large corn harvest, helped along by much-needed rains during August. The heavy harvest and ongoing trade disputes have been weighing on the market, which lost nearly 70 cents per bushel since mid-May.
Corn farmers are preparing themselves for further disappointment as they await the announcement of the $12 billion bailout for farmers affected by the trade wars. Details of the plan are expected on Monday, but current expectations are for the bailout package to heavily favor soybean producers, who may receive $1.65 per bushel, while corn growers may get a measly 1 cent per bushel in support.
While many farmers produce both crops, those that primarily grow corn will be disappointed by the lack of aid. As one of our farmers lamented to us Friday morning, “One cent per bushel? That ain’t enough to fix a check for!”
**Oil Spurts Higher
Petroleum prices saw their biggest weekly gain since June, topping $69 per barrel on Friday.
The market is being boosted by ongoing strong refinery demand, which is consuming crude oil near a record pace, pumping out massive quantities of gasoline, diesel fuel, and other petroleum products. This helped reduce domestic crude supplies by nearly 6 million barrels last week, far more than expected.
Meanwhile, global production could flatline, especially as U.S. sanctions against Iran rise over the coming months. While U.S. allies haven’t signed onto the sanctions, U.S. threats have already scared off many foreign investors from Iranian projects. Iran is the world’s 6th-largest oil driller, and economic sanctions are expected to cut its production by nearly 25%.