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Hams Provide Excellent Feature Opportunities for Year-End Holidays

April 25, 2022

Profit Maximizer Report

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    • Pork prices have been trending sideways in recent days as retailers focus on cleanup after Easter and grilling season demand has yet to kick in high gear.
    • With 4.7 million turkeys lost so far, and possibly more to be lost in May, hams are well positioned to see more holiday features later this year.
    • Trim prices normally move higher in the spring but the pace of inflation has slowed down, in part because packers have been able to trim more hams and shoulders. This has helped clean up the market for bone-in products, with bone-in ham values at the highest point since last summer.
    • Pork belly prices have ben range bound but have more upside price risk for late May and June due to seasonal demand and lower slaughter. Processors have done a better job building inventories, with belly refrigerated stocks at the end of March up 60% from a year ago and 13% higher than the five-year average.
    • Hog slaughter should decline in the next four weeks and be at 2.3 million head/wk. by late May.

Bird Flu, Turkey Prices and Potential Impact on the Fall Market for Hams

US turkey supplies are expected to decline sharply in the spring and summer of 2022. Highly pathogenic avian influenza (HPAI) has been spreading like wildfire across the US. In the absence of a vaccination program, the only way to stop the spread is by euthanizing all the birds in an operation. Since the first week of February, 31.6 million birds have been destroyed, the majority of these being table egg-laying hens. USDA reports that 4.7 million turkeys raised for meat were destroyed between early February and the end of last week. Even if no other cases are reported starting tomorrow, the losses sustained so far imply a 5.5% decline in turkey slaughter for Q2 and a 3% decline in slaughter for Q3.

Unfortunately, it is likely we will see more outbreaks and birds lost. In 2015, about 22 million birds in total were lost in April and another 24 million were lost in May. The disease this year started earlier but it will likely have a similar long tail. By mid-June of 2015, about 36 million table egg-producing layers and 7 million turkeys raised for meat were destroyed. And it took until the following year for the supply to recover.

The big debate/speculation currently is whether the expected shortfall in turkey production will have a direct impact on ham prices in the fall. Some argue that retailers will have little choice but to continue to subsidize whole turkeys since this is a traffic driver during the holidays. Some of the largest retailers were especially aggressive at the end of last year in covering needs for the new season. The primary motivation was not bird flu, it was a remote possibility, but rather the spike in feed costs and tight supply availability. The challenge for smaller market participants, be this distributors, retailers or foodservice operators is the ability of their suppliers to deliver on contracts. Many contracts have an act of god clauses. Others may see suppliers demand higher prices otherwise they may decide to break their contracts.

The price of boneless/skinless breast meat is currently $5.50/lb. and rising almost daily. When it is all said and done we could see breast meat prices at $7/lb. Delivering product at $3-$4 under the market could be too much for some suppliers to bear. We suspect this will provide some support to the market. However, this was not so much the case in 2015 (see chart above). The difference this year is broader inflation, which was not the case in 2015. It will be much more difficult this year to subsidize turkey retail sales when other meat prices are dramatically higher.

For now ham prices continue to provide retailers with excellent value. The price of bone-in hams is still trading at under 70 cents per pound. The price of boneless hams is now trading under $1.60/lb.

Cold Storage Inventories Increase as End Users Prepare for Tighter Supplies this Spring and Summer

Red meat and poultry supplies in cold storage have been slowly improving although they remain well below the five-year average. The situation varies greatly by protein, and even for specific products. As such, it is important to look at the report details rather than the broader numbers. The total supply of beef, pork, chicken and turkey in cold storage at the end of March was 2.110 billion pounds. That is 4.2% higher than a year ago but still 8% lower than the five-year average. Inventory increased 1.1% from the previous month compared to an average 0.6% drawdown in the past five years.


The total supply of beef in cold storage at the end of March was estimated at 536.9 million pounds. That is 11.2% higher than a year ago and 13.5% higher than the five-year average. This was the highest end-of-March beef inventory on record, driven in large part by more beef cuts in cold storage.

The inventory of beef cuts in storage at the end of March was estimated at 53.8 million pounds, 53.8% higher than the previous year and 40.9% higher than the five-year average. Inventories of beef cuts were up 6% from the previous month compared to an average drawdown of 2% in the previous five years. We think some of this may be demand-related, but also a slowdown in export shipments and inventory building ahead of possible price inflation during May and June. The increase will help temper beef price inflation once summer grilling demand gets underway.

Boneless beef inventory was 487.2 million pounds, 8.1% higher than a year ago. Inventories increased 0.6% from the previous month compared to an average drawdown of 3.6% in the previous five years. High cow slaughter may have pushed more boneless beef supply in cold storage. The biggest increase in inventory has been in the West South Central Region.


Pork supplies in the freezer remain light from a historical perspective but continued to improve vs. the previous month. Some of the strength in price, especially for items such as trim and hams, may have to do with processors looking to build some inventory ahead of anticipated tight supplies in the spring and summer.

The total inventory of pork in cold storage at the end of March was 487.2 million pounds. That is 8% higher than a year ago but 14% lower than the five-year average. Inventories increased 1.5% from the previous month when normally they decline in March. The later Easter this year likely contributed to this as well.

The total inventory of hams in cold storage was 74.1 million pounds. That is 21.8% higher than a year ago but 15.7% lower than the five-year average. Inventories declined 12% from the previous month, but again the late Easter this year contributed to the lower than normal drawdown in stocks.

End-users remain concerned about belly prices in the summer and have been pressing hard to build some inventory. At the end of March, the total supply of bellies in cold storage was 56.8 million pounds, 60.4% higher than a year ago and also 12.6% higher than the five-year average. Inventories increased 13% from the previous month compared to a 9% average increase in the previous five years.


Chicken inventory numbers were mixed. The total supply in cold storage at the end of March was 777.4 million pounds. That is 5.1% higher than a year ago but still 6.7% lower than last year. Chicken inventory declined 1% from the previous month, a slower drawdown than in previous years. The inventory of chicken breast in cold storage remains extremely limited at 167.5 million pounds. That is down 17.8% from a year ago and 13.8% from the five-year average. On the other hand, the inventory of leg quarters is now up 73.7% from last year, possibly because of export bird flu restrictions. The inventory of wings has been declining but it is still 78% higher than last year and 15% higher than the five year average.

Price Charts


Weekly Pork Price Summary

USDA prices for pork sub-primals, including butt, loin, ham, picnic, belly, trim, and spareribs.

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