Pork cycle

In economics, the term pork cycle, hog cycle, or cattle cycle^[1] describes the phenomenon of cyclical fluctuations of supply and prices in livestock markets. It was first observed in 1925 in pig markets in the US by Mordecai Ezekiel and in Europe in 1927 by the German scholar Arthur Hanau [de].^[2]

While the pork cycle is so named for its genesis in the economic analysis of livestock; the phenomenon has far-spanning implications that capture most goods. In short, the pork cycle runs as thus:

1. A demand for pork emerges, and so one or two farmers begin raising pigs. While pig supply is limited, prices are high – at this point of the cycle, pork is a rare good.
2. More farmers realise the value potential and also begin raising pigs. As more and more piggeries come 'online,' the price begins to decrease as supply becomes more voluminous.
3. At some point, demand and supply equalise; or supply may outstrip demand. Pork may become a commodity, or consumers may get bored of pork.
4. In turn, 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.
6. In turn, there are less farmers raising pigs, and so pork goes back to being a high-priced item.
7. The cycle resumes again.