Tuesday, November 18, 2008

Peak Pork! -- or, 'we are all sausages'

remember to add some Hogs to your holiday shopping list.

the title of the post is a joke. pork production hasn't 'peaked' and isn't likely to, although a temporary slowdown in production growth wouldn't surprise me.

the moving average on this chart of Lean Hogs future contracts represents the average price of the last 25 years. swine's selling for the same price as when I was born. same price as when I dropped out of high school. same price as when I dropped out of college. pork -- the epitome of price stability.

but I believe that in the next phase of the Food Bubble, pig prices will get pushed up to a new, permemently higher level.

below is the daily chart of the February 2009 Leans Hogs future contract. a short-term decline into the mid- to high-50s would perfectly play into long-term technical picture as well as be in keeping with my short-term outlook for the markets in general. though I'd give it perhaps a 25% chance that the recent bottom will hold. but once this current sell-off runs its course I would expect a rapid climb to commence into 70s.

yeah, but my primary motivation for this post was just make you watch this video: