Too many fat pigs makes hog futures the biggest loser

Chicago

HAM, bacon, ribs, pork loins - if it has to do with pigs, prices are in the doldrums.

Hog futures were the worst investment in commodities last quarter and in the past year. That's because there are simply too many pigs. They are so numerous these days that slaughterhouses will have to add shifts and operate on Saturdays in November and December to process them all into food, according to Will Sawyer, an Atlanta-based vice-president for Rabobank International.

The huge supplies are coming at a time of tepid export demand. China, which more than doubled US pork purchases in the first half of the year, has now put the brakes on buying. Devaluation of the peso also threatens shipments to Mexico, the destination for 40 per cent of US hams. Wholesale prices for pork cuts such as ham and ribs are the lowest for this time of year since 2009. Hedge funds are signalling the meat will probably stay cheap, as speculators cut their bets on a hogs rally i…