Wednesday, April 29, 2009

Where's The Direction For The Price Of Pork?

It is rather unfortunate for the global economy having need to tolerate another economic nuisance when we already have a big one. The swine flu pandemic is set to be the gravity towards any effort to jumpstart the economy. While it hits the global economy hard, it hits hog farmers even harder

Over the past few days, demand for pork plunged critically as consumers are shying away from all pork related meal, from pork chop to sausage to beacon. The fall in consumption happens both inside & outside America. Countries like China, South Korea & Russia have banned the imports of North American pork. This sent the price towards a downward rally

While some may argue that hog farmers can always attempt to stabilise the price by cutting the supply of hogs to market, it is rather futile in this case. Fall in demand is likely to outweigh the fall in supply. So price will fall anyway. Secondly, pork is not a necessity like oil. Unlike oil, pork has many substitutes like chicken, fish, mutton & beef

Any attempt to revive the price upward, will cause consumers to further substitute towards other form of meat

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