Last Friday’s Restaurant Performance and Consumer Sentiment Index both indicated some softening. The Conference Board Consumer Confidence index was up slightly, but not enough to get excited about. Domestic demand has been good this year as these measure have improved slowly and, in the absence of clear concerns, I think will continue to be strong especially in light of higher beef prices.

Exports are still down for the year but have performed, in my opinion, remarkably well since the shocks of the Russian embargo and the commencement of China’s ractopamine “certification” program last spring. July data will be released later this week and I expect it to be good. Not spectacular, but okay.

Finally, packing capacity should be sufficient for the numbers we expect this fall. Therefore, hog demand will remain strong relative to wholesale and retail demand thus supporting the prices that producers receive. I had feared back in 2011 and early 2012 that industry expansion would severely tax capacity this fall. Last year’s short crop allayed that fear but actually just changed the time frame. Lower costs and expansion in the next 12 months will put us tight in Q4-‘14 and VERY tight in Q4-’15. And there is nothing happening at present to expand capacity. Keep that in mind as you make your plans.