How does the pork market work?
The way the
pork market works is similar to a pipeline. If we have 240 million
pounds going into the pipeline per week, that means 240 million pounds
have to come out. Also keep in mind that we have whole hogs going
in so we have to have whole hogs coming out. If, on one particular
week, 50 million people decide not to eat their pound of pork, we will
have 50 million pounds left in the pipeline.
We still
have the 240 million pounds going in, so the price on the new pork will
have to be lowered to be sure it will move through the pipeline.
The effect this has at a distributor level is that two sales people
selling the exact same ham from the same pork company could have two
different prices. One could have inventory on hand at the old
higher price and the other could have inventory at the new lower
price. The market changes daily depending on the supply and
demand.
