The hog situation

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Material Information

Title:
The hog situation
Physical Description:
32 no. : ; 28 cm.
Language:
English
Creator:
United States -- Bureau of Agricultural Economics
Publisher:
U.S. Dept. of Agriculture, Bureau of Agricultural Economics
Place of Publication:
Washington
Publication Date:
Frequency:
monthly
regular

Subjects

Subjects / Keywords:
Swine -- Marketing -- Statistics -- Periodicals -- United States   ( lcsh )
Genre:
serial   ( sobekcm )
federal government publication   ( marcgt )
statistics   ( marcgt )
periodical   ( marcgt )

Notes

Statement of Responsibility:
United States Department of Agriculture, Bureau of Agricultural Economics.
Dates or Sequential Designation:
HS-1 (Nov. 1936)-HS-32 (June 1939).
General Note:
Title from caption.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
oclc - 04752171
ocm04752171
Classification:
lcc - HD9435.U5 A25
System ID:
AA00011234:00026

Related Items

Preceded by:
World hog and pork prospects
Succeeded by:
Beef cattle situation
Succeeded by:
Sheep and lamb situation
Succeeded by:
Livestock situation

Full Text




UNITED STATES DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS
WASHINGTON

JANUARY 19, 1939


I H E H OG S T-U A T I ON


j~EM CE OF HOGS AT CHICAGO. FEDERALLY INSPECTED
.LAUGHTER OF HOGS. AND INCOME OF INDUSTRIAL
WORKERS, UNITED STATES, 1929-38


Income of industrial workers*
S(Index numbers. 1924-29=100)










..L I .l .. .. .. I .:. M .-. .. .. I.I ..,..-..I I .. ..-. .. .l .. .. ..I I.. t h. .. .


1929 1930


1931 1932 1933 1934 1935
*ADJUSTED FOR SEASONAL VARIATION


1936 1937 1938 1939


NEC. 34437 BUREAU OF AGRICULTURAL ECONOMICS


THIS CHART SHOWS THE RELATIONSHIP OF CHANCES IN SLAUGHTER SUPPLIES
OF HOGS AND CHANGES IN INCOMES OF CONSUMERS TO CHANGES IN HOC PRICES.
A LARGE INCREASE IN HOG SLAUGHTER OCCURRED IN THE LAST HALF OF 1938,
BUT THIS WAS PARTLY OFFSET BY SOME IMPROVEMENT IN INCOMES OF CONSUMERS.
HOG PRICES DECLINED ALMOST STEADILY FROM AUGUST THROUGH DECEMBER 1938,
BUT THE DROP WAS MUCH LESS THAN THAT WHICH OCCURRED IN THE SAME PERIOD
or 1937, WHEN CONSUMER INCOMES WERE SHARPLY REDUCED.


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- 3 --


THE HOG S ITUAT ION
---------------------------,,-,

Summary

Slaughter supplies of hogs in the current marketing year, which began

October 1, probably will be at least 15 percent larger than in the 1937-38

marketing year, according to the Bureau of Agricultural Economics. This

increase in market supplies is a reflection of the larger pig crops in 1938

than in 1937. The 1938 spring pig crop was 13 percent larger than that of

a year earlier and the 1938 fall pig crop was 18 percent larger,

Consumer demand for meats will be stronger this year than last. But

the effect of this improvement in demand on hog prices is expected to off-

set only partly the effects of the increased supplies.

The upswing in hog production in 1938 reflects the abundant feed

supplies, the high hog-corn price ratio and the low level of hog production

in some areas, especially in the Western Corn Belt. Present indications

are that a further marked increase in the number of pigs raised will occur

in 1939. On the basis of breeding intentions reported about December 1,

it was estimated that the number of sows to farrow in the spring of 1939

will be about 21 percent greater than the number farrowed in the spring of

1938. If food crop production this year is near average, it is not un-

likely that the combined spring and fall pig crops of 1939 will roach or

exceed 80 million head, which is the average of the 5 years prior to the

1934 drought,

If the 1939 pig crop should be as largo as or larger than the 1929-

33 average, hog marketing in 1939-40 (year beginning October 1939) will

increase to a level at least as high as that prevailing before the drought.

This would mean that inspected, hog slaughter in 1939-40 would be the


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larrest since 1932-33 and it probably would be about 35 percent greater

than the 34.6 million head slaughtered in 1937-38,

The increase in consumer demand in 193'-39 will not be sufficient

to offset the effect of increased sul:olies, and hog prices in 1938-39

probably will vi\'-r.L.-e lower than in 1937-33, when the average was about $8.

And unless there is further material increase in consumer demand in 1940,

hog prices in the 1939-40 marketing year will average lower than in the

current marketing year.

With the cros-ective increases in hog rroluction and slaughter, the

outlook for lard in the next few years is decli,.ily unfavorable. During

the 1);25-29 period the United States exported the lard from about 22

million ho-;, or about 33 r-rcent of the total slaughter. Since 1929

foreign demand for hog products has been sharply reduced.. In the 3 years,

1935-37, we c:::.orted the lard from less than 10 ,.rcont of our total hog

sl auhter. And the situation with respect to r-os, ctive foreign outlets

for lard indicates little likelihood of increasing our exports of this

co.-.olit:Y in the next few years to the 1925-29 level. The production of

lard from the *r-.'s .ecive increased output of hogs in 1939-40 will be con-

siderably larger than n..ci i to provide for normal consumption rcquir-emnts.

nRVI -. C." ;.C?-i DEVELCF:V :T..S

AC'-.Ca:D),- The market movement of the s-ring pigs in
substantial volume began earlier than usual in l?38. Hog
marketings in Aj' st w;ro larger than in July for the
second time on record. Largely as a result of this early
increase in rarkctings, he rices bc an to decline in
August, ;:hreas in most y-"ars ric.s do not weaken until
after :.iil-.: to:b cr. This decline in -:-icos continued
until early Decutber,

.Markotings continucil to incr.aso aftor A'.Fu.t, ox-
coeding ma-rketings a y,,ar earlier, but a part of the effect
of this upon prices in recent months has boon offset by
soCme i.:rovc.:.cnt in consumer dr-.r:. 7Th larger supplies
in the current markctin; year than last reflect chiefly the
13 ;.crcc.i' increase in the 1 35 sprin; pig crop over that
of 1937,






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Rog prices steady in December and early January

Although prices of hogs continued to weaken in early December,
they held fairly steady during the remainder of that month and in early
January. The spread between prices of light and heavy hogs widened some-
what during December, whereas in October and Novemberr the range in prices
of all weights of hogs was very narrow.

The average price of butcher hogs at Chicago for the first week of
January was $7.25 about the same as in thefirst week of December, but it
was about 70 cents lower than in early 1938. In late July 1938, prices
of hogs wore at the highest level for the entire calendar year, and the
weekly average price of butcher hogs at Chicago for the week ended July
23 was about $9.65. Since that time prices have dropped about $2.40.

Further increase in hog marketing in December

The drop in prices in recent months was brought about by the large
seasonal increase in hog marketing. Marketings nearly doubled from July
through December. Inspec ed hog sl?.ujhter totaled 4,346,000 head in
December. This was 11 percent larger than in November and 10 percent greater
than in Deceriber 1937. In the first 3 months (October through December)
of the present hog marketing year, inspected hog slaughter was about 16
percent larger than that of a year earlier.

Average weights of hogs increased seasonally in December. At the
seven loading markets the average weight was slightly heavier than a year
earlier, while in both October and November it was lighter.

Hog-corn price ratio down but continues much above average

Corn pricess rose during December, and as hog prices were steady to
lower, the hog-corn price ratio declined. Based on prices of hogs and
corn received by farmers, the hog-corn price ratio in the Corn Bolt on
December 15 was 17.1 compared with 20.1 a month earlier. Despite this de-
crease the ratio continues to be much higher than average; thus indicating
that corn is cheap in relation to hogs.

Storage stocks of pork and lard increase seasonally in December

Stocks of pork increased about 42 percent from December 1 to January
1, aiid lard stocks increased about 44 percent in this period. Pork stocks
on January 1 were about 7 percent larger than those of a year earlier,
but they wore considerably smaller than the 1933-37 January 1 average.
Stocks of lard at the beginning of 1939 wore about double those of a year
carli'r but wore only slightly larger than average. The increase in
storage holdings during December reflects partly the relatively large hog
slaughter during the month, but it also appears that storage demand is
somewhat better than last year. The increases in stocks of both pork and
lard in terms of pounds in December 1938 was considerably greater than in
December 1937, when storage demand was relatively weak.






Storage holdings of pork and lard on the first of the month,
October-January, average 1933-37, 1937-38 and 1938-39

: -year average 1937-38 1938-39
Month
SPork Lard Pork : Lard : Pork : Lard
Spillion Million Million Million Million Miillion
: pounds pounds po funds pounds pounds pounds

Oct. .....,: 415 108 283 73 277 90
Nov. ..,,o : 372 83 266 39 252 68
De*- ....- 425 80 307 34 299 74
Jan. ......: 560 98 399 54 1/ 426 / 107

1/ Frel i.i.zary.


Lar-e increase in pork exForts in November

Porik exports in November totaled about 11 million pounds and were
the largest for any month since November 1934. They were about 3.8
million or.und larger than those of Iovember 1937. A large -art of this
increase was in c .red pork, but exports of fresh pork also increased
materially Imports of pork in Novemberr totaled slightly less than 4
million pounds.

Lard ex .rts in November amounted to 16 million pounds compared with
21 million in October and 18 million pounds in November 1937. In the
earlier months of 1938 lard exports were larger than a year earlier, and
exports for the entire year were the largest since 1934. Although exports
of both pork and lard in 1938 were larger than in any of the 3 previous
years, tot l exports for the year were much smaller than in the years
prior to 1 -4.

OUTLC Ci:

The outlook for hogs has been changC-d somewhat since the release
of the 1939 hoi outlook report in early November. It now seems probable
that hog marketing in the present marketing year, which began last
October, will be larrgr than appeared likely a few months ago, and they
will be much larger than in 1937-38. It is also expected that marketing
in 193?-40 will be much larger than in the present year, and they may be
in excess of the average of the years 1929-33, before hog production was
curtailed so severely by the droughts of 1934 and 1736.

1938 fall pi- crcp 18 pcrccnt larger than a year earlier

According to the D,:ce-ber pig crop report, the 1938 fall pig crop
was estimated to be 27,651,000 head, which 'was 4.2 million head or 18
percent larger than the fall crop in 1937. The 1933 fall crop was the
largest since 1933, ani was only 3 percent smaller than the average for


- 6 -


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the country, with the largest increases in the West North Central and
South Central States.

The larger fall pig crop this year than last reflects increases in
both the numbers of sows farrowed and in the number of pigs saved per
litter, The number of sows farrov.3d last fall was 16 percent larger than
that of a year earlier. This was somewhat greater than the 9 percent
which was indicated on the basis of breeding intentions for fall farrow
reported in June 1938.

The increase of 18 percent in the 1938 fall pig crop over a year
earlier followed an increase of 13 percent in the 1938 spring pig crop.
The combined spring and fall pig crop was estimated to be abo lA7.1
million head, or 15 percent larger than that of 1937. This 'The largest
yearly pig crop since 1933, but it is about 11 percent smaller than the
1929-33 average.

The following table shows the annual pig crop in the .United States
and in the major geographic regions for the years 1934 through hy938 along
with the 1929-33 average. 'it will be noted from this table thEt the 1938
pig crop was about 32 percent below the 1929-33 average in the West North
Central States (Western Corn Belt), and about 12 percent below average in
the Western States. These two re-ions were most severely affected by the
droughts of 1934 and 1936. In the East North Central States (Eastern
Corn Belt) the 1938 pig crop was about equal to the 1929-33 average; in
other regions of the country it was substantially larger than this average.


Combined spring and fall pig crops, by r.Cions, average
1929-33, annual 1934-38


:Average:
. 1929-33:


: Thou-
: sands


S
'1934 :
*
*


Thou-
sands


1935 :
*
*


Thou-
sands


1936 :

*


Thou-
sands


1937 :
*
:*


Thou-
sands


1938
1/


Thou-
sands


:1938 as a
;percent-
:age of
: 1929-33
: average


percent


E.N. Central
W.N. Central
All N., Central.
North Atlantic
South Atlantic
South Central
Western
United States


: 20,174
: 41,012
S61,187
1,378
4,941
9,349
3,177
80,032


15,445 15,442 18,081
25,025 22,646 26,376
40,47o 38,088 44,457
1,158 1,270 1,511
4,570 4,943 5,642
8,510. 8,779 10,595
2,058 2,006 2,712
56,766 55,086 64,917


17,860 20,147 99.9
23,581 27,812 67.8
41,441 47,959 78.4
1,615 1.673 121.4
5,925 6,590 133.4
10,206 12,061 129.0
2,720 2,805 88.3
61,907 71,088 88,8


1/ Preliminary.


Region


-


-----I ----Ll~


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Further large increase in 1939 pi crop expected

The sharp upswing in hog production in 1938 reflects the abundant
feed supplies, the high hog-corn price ratio and the low level of hog
production in some areas, especially in the Western Corn Belt.

A further marked increase is indicated in the number of pigs raised
in 1939, On the basis of breeding intentions reported by farmers about
December 1, it was estimated that the number of sows to farrow in the
spring of 1939 would be 21 percent larger than the number farrowing in the
sprin- of 1933. If the number of pigs saved per litter this spring should
be. about the same as that of 1938, the 1939 spring crop will total about
52 million head. A crop of this size would be the largest since 1933 and
larger than the 1929-33 average.

Ho definite indication of the size of the 1939 fall pig crop can
be given at this time. But, if feed crop production this year is about
average, it seems probable that the fall crop of 1939 will be larger than
that of 1938. If the 1939 fall crop should be about 10 percent larger
than that of 1938, the total 1939 pig crop (spring and fall combined) pro-
bably would number more than 80 million head. A total yearly crop of
about 80 million head would be about 14 percent larger than that of 1938
and about equal to the 1929-33 average.

Larger hog slaughter in 1938-39 expected

The increase in the 1938 spring pig crop has been reflected during
the past 3 or 4 months in increased marketing over a year earlier. In
view of the larger spring and fall pig crops of 1938, inspected hog
slaughter in the 1938-39 marketing year is expected to total around 40
million head compared with 34.6 million in 1937-38. Slaurhter in the
present marketing year will be the largest since 1933-34, but it will be
about 12 percent smaller than the average of the 5 years 1929-33.

In the outlook report on hogs for 1939, included in the November
issue of The Hog Situation, it was stated that inspected hog slaughter
probably would total between 37 and 38 million head. This estimate has
been increased to about 40 million chiefly because the 1938 fall pig
crop was considerably larger than had boon expected.

It should be noted also that in all years oecopt 1937-38, when the
hoL-corn price ratio has been high and feed supplies abundant, slaughter
in the first 3 months of the marketing year has represented a smaller
than average porcontage of the yearly total. Last year, under similar
conditions of feed supplies and hog and feed prices, the proportion of the
yearly total sl-,ujhter in the first quarter of tho year was about average.
In the current marketing year, 1938-39, if inspected slaughter from
October through December should be about an average proportion of tho
yearly total, slaughtor in the 1938-39 marketing year would total between
40 and 41 million head,


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- 9 -


Large slaughter in 1939-40 probable

As already indicated, if feed crop production is near average in
1939, the pig crop this year probably will total about 80 million head.
Pigs from the 1939 crop will be marketed largely in the 1u'39-40 market-
ing year, beginning next October. With a crop of about 80 million head,
inspected hog slaughter in 1939-40 would total 46 million head or more..
Such a slaughter would be the largest since 1932-33, and would be about
equal to the 1929-33 average. It is even possible that the 1939 pig crop
will exceed 80 million head, and in such case inspected hog slaughter in
1939-40 would be 1arge.- than the 1929-33 average. Thus, with favorable
feed crop,, in 1939, it appears probable that the number of pigs raised
in 1939 c.r the number of hogs slaughtered in 1939-40 will return to the
level prevailing before the 1934 drought.

Because of the feed shortage resulting from the 1934 drought, the
1935 pig c 'p was reduced to .bout 55 million head, or 31 percent below
the 1929-.?' vor- ee, The pig crops in 1936 and 1937 were somewhat larger
than that oc 13 'but continued rve.'b below aver-ge. With good feed
crops :.n ]:' 7 ai2 1935 t pig r~.c i 193?J was about 29 percent larger
than in lIJ, ani In 1535 the i, .:-c? say be about 45 or 50 percent
greater than the low level rc.-chd followiiij the 1934 drought. C".arLjes in
the annual pig crop and in inr.pectod hog slaugl-.tor in recent years are
given in the following table.


Pig crop, inspected slaughter and prices per 100 pounds
of hogs, and national income, average 1929-33
annual 1932-38

: : Hogs 1/
Hos National
:.: : Average : Average :
Year P.ig crop .ITnscctod price price income
:slaughter paid :received by: paid out
2/ :by packers : farmers 3/
Million
:Thousands Thousands Dollars Dollars dollars
Average,
1929-33 ...: 80,032 45,354 5.71 5.35 61,644

1932 .......: 82,525 47,103 3.68 3.36 49,024
1933 ........: /84,200 43,911 4.07 3.73 45,317
1934 ...... 5666 30,680 7.75 6.95 51:510
193; .....: 515A -6 31,022 9.79 9.13 55,137
1930 .....: 6,:..:7 34,142 10.18 9.44 62,586
1937 .6....: 61,9o0 34,580 8.41 8.03 69,330
1938 .......: J/7l,8 6/ 43,000 5/ 64,500
-- ~- ^ .. ... .. .
1i/ i.iar'.,ti g ,.,-.-r bognrig October.
2/ Bureau of Anilr.1 lI:di'try.
~/ Department of Coommrce.
/ ALout 6 million pigs from the 1933 crop were purchased and slaughtered
under the Agricultural Adjustment Administration Emicrgencrcy .r-o-ram in
August and September 1933. These pigs are not included in sla,'ihtor
figures for 1932-33 or 1933-34. 5/ Preliminary. 6/ Estimate.


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- 10 -


Hog prices

The effects of the larger..market supplies of hogs upon hog prices
in 1938-39 will be partly offset by im:-rovement in consumer demand for
meats. Industrial activity and employment have increased materially.
since last summer, and this has prov.l.Jd support for hog prices. It is
expected that the :ener.dl level of consumer buying power in 1939 will be
higher than the averse for 1 C8, but not .greatly higher than in-the last
part of that year. -he improvement in demand probably will be relatively
small compared with the increase in supplies of hogs.

:.o definite indication of the probable level of hog prices in
19j3-40 is now possible. But if hog slaughter in 1939-40 should be about
equal to the 1929-33 average, it would be approximately 15 percent greater
than the slaughter in 1938-39 and nearly 35 percent larger than in 1937-38.
If supplies should be this large in 1939-40, consumer demand and national
income would have to increase to a level about equal to that of 1929, in
order for hog prices in 1939-40 to average as high as in 1937-38, about
$8. Stated in another w .y, the average price of hogs in 1939-40 probably
could not be equal to thrt ;. 1937-38 unless national income in 1940 were
at east 25 percent greater than in 1938. So large an increase in national
income by 1940 does not now seem likely.

It is expected, however, that the level of national income and con-
sumer demand for meats in 1940 will be higher than in 1938, and much
higher than the depression lows of 1932-33. Consequently, even if supplies
of hogs increase to the level prevailing before the drought, it is not
expected that the average price of hogs in 1939-40 will decline to any-
thing like the low levels of 1932 a.1 1933. But it seems .robable, in
view of prospects for increased hog production, that the trend in hog
prices will be downward in the next 2 years, with the average price in
1938-39 lower than in 1937-38 and with the average price in 1939-40 lower
than in 193G-39.

The lard situation and prospects

The prospective increase in hog production probably will not result
in a supply of pork in 1939-40 in excess of the quantity necessary to
provide for a per capital conrumiption in this country about equal to the
average of the post-war years before the 1934 drought. But the volume
of lard produced from the prospective increased output of hogs in 1939-40
will be considerably larger than that needed to provide for normal con-
sumption requirements.

In each of the post-war years, especially prior to 1935, exports
of lard reproson-t.- a mvth greater proportion of the total output than
did exports of ;ork. In the period 1925-29, for example, the average
yearly exports of lard r -pr ;onted the lard pr'~lucti-.n from about 22
million hogs or about 33 percent of the total slaughter. In the same
period the Tvi-r.,c yearly exports of pork represented the output from
about 3 million hogs, or about 4 percent of the total hog slaughter. Since
1929, hovwevr, the foreign outlet for pork and lard has boon sharply







- 11 -


reduced by quotas, exchange regulations and barter agreements.

The following table gives exports, production and consumption of
pork and lard and total hog slaughter from 1935 through 1937 with
averages for 1920-24, 1925-29, and 1930-34.


Total production, consumption, and exports of pork and lard,
hog slaughter, and hogs required to produce exports, averages
1920-24, 1925-29 and 1930-34, annual 1935-37


Total 'Total Per capital Exports
: _ro auction : consum-tion consumption : 1"
Year : Pork, Pork: : Pork :
:exclud- :exclud- : :exclud-:
: ing : Lar : ing : Lard : ing Lard Pork Lard
: lard : lard : lard : :
:Million Million Million Million Million Million
:pounds pounds pounds pounds Pounds Pounds pounds pounds
ge:


Avera


1920-24
1925-29
1930-34

1935
1936
1937


8,424
8,480
8,719

5,953
7,535
6,886


2,329
2,285
2,270

1,267
1,673
1,434


7,560
3,069
8,479

6,189
7,121
7,120


1,449
1,513
1,678

1,218
1,443
1,363


68.7
63.2
67.9

48.5
55.4
55.1


13.2
12.8
13.5

9.6
11.2
10.5


794
370
169

89
S67
63


869
752
561

97
112
137


: : Hogs required : Perccita-e of total hog
: Total hog : to produce : slaughter required to
: slaughter exports of : produce exports of -


Average
1920-24
1925-29
1930-34

1935
1936
1937


Pork
: Thousands Th.:usands


68,768
67,638
69,986

46,230
59,188
53,745


6,464
2,976
1,330

693
533
484


Lard
Thousands

25,650
22,253
17,287

3,560
3,966
5,160


Pork Lard
Percent percent


9.4
4.4
1.9

1.5
0.9
0.9


37.3
32.9
24.7

7.7
6.7
9.6


_/ United States Department of Commerce. pork includes bacon, hams and
shoulders, and fresh, canned, and pickled pork. Lard includes neutral lard,


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I.'Iri ERSI y OF FLORIDA
:llU II I I1 1111 II Jll 111111111 lll iii 11 Ii
HS-27 12 3 1262 08861 7294



If it is assumed that total hog slaughter in 1940 will be about 70
million head, and if yields of pork and lard are about the same as before
1934, the total output of pork would be about 8.7 billion pounds and the
total production of lard would be about 2.3 billion pounds. It is
estimated that population in the United States in 1940 will total about
131.4 million persons. If no pork were exported or imported, the per
capital consumption of pork in 1940 would be about 66.2 pounds compared
with the 1925-29 average of 68.2 pounds.

If no lard were exported or imported, lard consumption per capital
in 1940 would be about 17.5 pounds compared with.the 1925-29 average of
12.8 'oun.':, It does not seem probable, however, that the per capital
lard consur:tion can be increased much beyond the 1925-29 average. If
this is the case about 600 million pounds of lard would have to be dis-
pos..i of in foreign markets or for inedible uses. At the present time
the forci- situation indicates that there is little likelihood of in-
cr-c:.ln' lard exports to this figure

In any event it appears that further marked increases in hog produc-
tion will be accompanied by a burdensome lard surplus. In 1938 the whole-
sale price of refined lard was but little higher than the price of hogs,
whereas it usually has been from $2 to $6 per 100 pounds higher than the
price of h .j.. It should also be noted that .prices of cottonseed oil
(the principal competitor of lard) have been high in relation to lard prices
during the past year. Thus, with the prospective increases in hog and
lard production, the outlook for lard in the next few years is decidedly
unfavorable