Study Highlights Hog Pricing Trends, Importance of Livestock Mandatory Reporting

In a policy brief published by Iowa State University Center for Agricultural and Rural Development, economists apply the USDA’s Livestock Mandatory Reporting (LMR) data to identify changes in how producers have priced hogs over time. Ever.ag Chief Livestock Economist Steve Meyer and Iowa State University associate professor and extension economist Lee Schulz examined various pricing mechanisms across three time periods and found that, in all but one instance, average negotiated prices have been lower than other categories. For all time periods studied, negotiated prices have been the most variable. Additionally, the average negotiated price has the largest coefficient of variation, indicating greater relative price risk than other pricing categories. Since wholesale pork volumes and prices became mandatory under LMR in 2013, producers and packers have been increasingly using USDA’s calculated pork cutout value as a pricing mechanism for hogs. Meyer and Schulz found that, for all t