Pork cycle

In economics, the term pork cycle, hog cycle, or cattle cycle describes the phenomenon of cyclical fluctuations of supply and prices in markets. It was first observed in 1925 in the pig market in the US by Mordecai Ezekiel and in Europe in 1927 by the German scholar Arthur Hanau. In short, the pork cycle runs as thus:

  1. As pork, being a rare good, is a high-priced item, a few farmers decide to start raising pigs. While pig supply is limited, prices remain high.
  2. More farmers realise the value potential and also begin raising pigs. As more and more piggeries come 'online' and start delivering pigs, the price begins to decrease.
  3. At some point, demand and supply equalise. Pig farms are still producing pigs and supply begins to outstrip demand. The prices decrease further. Pork becomes a common commodity, and consumers may get bored of pork.
  4. In view of the decrease in prices, farmers turn away from raising pigs, and go back to more valuable crops or livestock.
  5. As a result, the pork supply begins to decline, eventually below demand, and then pork goes back to being a high-priced item.
  6. The cycle begins all over.

While the pork cycle is so named for its genesis in the economic analysis of a livestock market, the phenomenon can be observed on the markets of many goods.

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