282 
American Agriculturist, October 27,1923 
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The Present Outlook in the Hog Market 
There Are Five Big Factors Controlling the Present Market Situation 
I N broad outlines the present hog 
market situation involves record pro¬ 
duction and record domestic consump¬ 
tion, large exports, a low ratio between 
prices of corn and hogs, and hog grow¬ 
ers about to cut production. At the 
moment, the market is going through 
the season when supply invariably is 
the lightest of the year, but when hog 
meats and lard stored earlier in the 
season partly fill the gap in current re¬ 
ceipts. Prices have had a welcome up¬ 
turn to the highest point since the end 
of last October. 
Somebody is producing too manjr 
hogs. Such was the conclusion of the 
committee of economists called by Sec¬ 
retary Wallace of the Department of 
Agriculture to report on the agricul¬ 
tural outlook. Their statement of the 
case was that “neither the corn situa¬ 
tion, the prospective European de¬ 
mand, nor the domestic industrial out¬ 
look warrants the maintenance of the 
very heavy hog production of the past 
year.” 
The present excess of hogs goes 
straight back to 
the so-called corn 
surplus which 
started with the 
crop of 1920 and 
shows how, in the 
long run, extreme¬ 
ly low feed prices 
fail to be of much 
advantage to the 
live-stock produc¬ 
er. In the last 
dozen years, the 
average farm 
price of 100 
pounds of live 
hogs has been 
about equal to the 
average farm 
price of eleven 
bushels of corn. 
Late in 1920 this 
ratio changed so 
that corn could be 
sold for consider¬ 
ably more in the 
form of pork than 
it would bring at 
the elevator. As this relationship con¬ 
tinued, producers began to breed more 
sows. By the time the early increase 
reached the marketing stage, demand 
for pork had expanded enough to ab¬ 
sorb the supply at higher prices. Corn 
was still depressed however, and the 
corn-hog price ratio rose to around 
eighteen bushels toward the end of 
1921 and early 1922. After that time 
the ratio began to go against the hog 
producer and by the summer of 1923, 
only eight bushels of corn were re¬ 
quired to equal the farm price of 100 
pounds of hog. 
Producers, speaking of them in the 
mass, do not live up to the saying that 
“it is the first of all things to see 
events in their beginnings and to per¬ 
ceive tendencies beforehand.” They 
continued to expand production after 
the handwriting appeared on the wall. 
About one per cent more pigs were 
raised in the six months ending June 
1, 1923, than in the corresponding 
period a year previous and on that 
date, the number cf sows bred or in¬ 
tended to be bred for fall litters was 
28.3 per cent more than farrowed last 
fall. 
Chart Shows Supply and Demand 
The accompanying chart shows the 
chief elements in the hog market situ¬ 
ation by calendar years since 1907, 
when the Federal Government first be¬ 
gan to inspect the slaughter of meats 
in packing houses whose products en¬ 
tered interstate commerce. Pork 
slaughtered under Federal inspection 
is practically equivalent to the com¬ 
mercial supply* Domestic consump¬ 
tion and exports represent the demand 
side of the market. 
In 1922, more hog product was 
slaughtered under Federal inspection 
than ever before. For the first six 
months of 1923 the output was twenty- 
seven per cent greater than in the 
same period of 1922. The same pro¬ 
portionate gain is unlikely during the 
last half of the year, but it is reason¬ 
able to expect that for 1923 as a whole 
the poundage of inspected hog products 
will he about twenty per cent greater 
than last year. This is a remarkable 
gain to take place from one year to 
the next, especially since last year it¬ 
self was a record breaker. 
During the hog year, which in trade 
circles is counted as starting on No¬ 
vember 1, domestic consumption and 
exports together must practically equal 
production. A look at the chart will 
show that domestic consumption of 
Federally inspected meats and lard has 
been hanging up new records each 
year beginning with 1920. In the first 
six months of 1923 the American pub¬ 
lic consumed twenty-four per cent 
more hog product than in the same 
period of 1922. For the year, as a 
whole, an increase of not far from 
twenty per cent is probable. 
Since Federally inspected meats are 
consumed primarily in the cities and 
towns, the present era of urban pros¬ 
perity has made it possible to market 
this enormous increase in the supply of 
pork without as large a decline in prices 
as would otherwise have taken place. 
Whatever the attitude of the city con¬ 
sumer may be toward long hours and 
high production in his own field, when 
it comes to consuming, he is a wOnder. 
Employment and wage conditions have 
made it possible for all the pork-chop 
eaters to gratify their tastes. 
The cotton belt provides a market 
for some of the Federally inspected 
hog product and the prevailing high 
level of cotton prices has broadened 
that outlet measurably. At the same 
time, two short cotton crops in suc¬ 
cession have reduced the supply of 
cottonseed oil for the manufacture of 
lard substitutes. 
Exports of hog products and lard as 
shown on the chart are much less uni¬ 
form from year to year than domestic 
consumption. Outside of war periods 
they represent the surplus of hog pro¬ 
duction over domestic demand at cur¬ 
rent prices. From 1920 to 1922 ex¬ 
ports were about fifty per cent above 
the pre-war level. In the first six 
months of 1923 they were 43.6 per cent 
larger than in the same period of 
1922. They have tapered off since, 
but the total for the calendar year 
will probably exceed 1,800,000,000 
pounds, which is eighty per cent above 
the pre-war level. 
Looking ahead from this point we 
are justified in expecting that the 
number of hogs reaching the market 
in the next twelve months will be 
larger than in the last twelve. The 
corn belt alone, which furnishes most 
of the commercial supply of hogs, 
raised nearly six per cent more spring 
pigs this year than last, according to 
the government’s findings. The west¬ 
ern States as a group reported an in¬ 
crease of eighteen per cent, but the 
East and the cotton belt reported a 
smaller pig crop. Moreover, every 
State in the Union reported an inten¬ 
tion to breed a larger number of sows 
for fall litters than farrowed in the 
fall of 1922. For the corn belt States 
the increase was 25.5 per cent. Again 
the western States led the field with 
an increase of fifty-one per cent. 
These intentions were expressed on 
June 1. Prices since that date may 
have caused many farmers to change 
their minds. An epidemic of cholera 
might play havoc with both spring and 
fall pig crops. As things now stand, 
however, we had best count upon at 
least a moderate increase in numbers. 
Then there are the extra brood sows, 
which must come on the market when 
the country starts to prune down pro¬ 
duction. 
While the corn crop is larger than 
last year, there is bound to be a smaller 
carryover. The crops of sorghum 
grains, of barley and oats also are 
larger and there is a lot of low grade 
wheat which will be fed. But, taking 
the increases in hogs and dairy and 
beef-cattle production into considera¬ 
tion, it is hard to escape the conclusion 
that feed costs will be higher than last 
year and that the corn-hog ratio will 
continue unfavorable well into 1924. 
Hog prices may remain about high 
enough to pay cost of production for the 
corn, however, even though they may 
not pay the full market price for it 
in all cases. 
With higher 
feed costs, the 
tendency will be 
to sell at lighter 
weights. This is 
already noticeable. 
The decrease in 
weight may offset 
most of the in¬ 
crease in numbers 
during the coming 
year so that the 
actual supply of 
pork may show 
but little gain. 
Eventually, a s 
this unfavorable 
feeding ratio con¬ 
tinues some one 
will breed fewer 
hogs. The in-and- 
outer, who is al¬ 
ways a factor in 
such a situation, 
will get out, those 
whose production 
costs are high will 
take to their storm cellars and the reg¬ 
ulars who have been raising more pigs 
than usual will raise fewer for a 
while and sell more corn. 
On the demand side, the most im¬ 
portant question is whether business 
depression is likely to occur before the 
adjustment of hog production to small¬ 
er volume is complete. Opinions of 
supposedly competent authorities are 
strangely divided as to when such a 
depression will occur, but relatively 
high purchasing power is likely to pre¬ 
vail in the cities well into 1924, at 
least. On the other hand, domestic 
consumption has probably about 
reached its upper limit except as it 
is stimulated by low prices at retail. 
With low prices prevailing, Europe 
will take a lot of pork and lard, but 
if prices should rise to a point that 
would be substantially profitable to the 
grower the volume of exports un¬ 
doubtedly would decline. 
Foreign buying power remains ex¬ 
tremely low and Germany, our chief 
lard customer, is in a sorry plight with 
over a million paper marks required 
to buy a pound of lard in our markets, 
to say nothing of the transportation 
and distributing cost. In short, we 
are able to supply with pork about 
20,000,000 more people than are in the 
United States, but that number of 
good customers is not to be found 
abroad. 
Seasonal Trend in Short Range View 
The short range view of prices is 
dominated by seasonal conditions of 
supply. Receipts always are lightest 
from the middle of August to the 
end of September and prices usually 
reach the year’s high point at that 
time. Furthermore, this is the sea¬ 
son when the demand for lard and 
cured meats picks up and packers are 
credited with being willing to see an 
advance in hog prices in order to help 
the sale of the products stored away 
earlier in the year. 
Spring pigs usually begin to troop 
to market early in October when 
(Continued on page 290) 
Trends in the hog industry. Production and domestic consumption as 
shown above, include only hog meats and lard slaughtered under Federal 
inspection. Farm slaughter and uninspected local slaughter have but little 
effect on prices in central markets 
