Document Type

Article

Publication Date

3-15-2001

Keywords

swine industry, hog markets, Lean hog index

Abstract

This paper examines the developments that have occurred in South Dakota's swine industry and offers insights into its future prospects. Data, trends, and literature related to this market were gathered in an effort to fill in specific gaps about South Dakota's market. Nationally and in South Dakota there are fewer producers raising hogs. The exit of relatively small producers from the industry reduced a seasonal spike of farrowings during the March-May quarter in recent years. A growing trend of in shipments, where feeder pigs are brought into South Dakota, finished, and marketed, has partially offset the reduction in farrowings. An analysis of a longstanding indicator of supply farrowing intentions, reveals that the closer intentions reported were more accurate than the distant intentions and that the overall accuracy is impressive. The general price level/or market hogs at Sioux Falls follows a similar pattern to U.S. prices. A seasonal trend exists at Sioux Falls, with prices higher from May through August. Analysis of location basis, the difference between the CME Lean Hog Index and the cash price at Sioux Falls, also reveals a seasonal trend and substantial variability across different months. Knowledge of basis is necessary when comparing different markets and when determining the effectiveness of risk management tools.

Comments

Copyright 2000 by Matthew A Diersen

Publisher

Department of Economics, South Dakota State University

Series Number

2001-2

Number of Pages

19

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