Pork Checkoff Industry News

Disease-related supply concerns have faded, while lower feed costs have encouraged heavier hog weights, adding modestly to pork supplies.

Pork supply is set to tighten sharply over the next three weeks. Slaughter fell below 2.4 million last week and the Memorial Day holiday will further disrupt production and reduce spot availability.

Spring and summer lean hog futures have lost momentum as the feared “marketing hole” has not materialized. Hog slaughter since early March is running slightly above last year and carcass weights remain steady, keeping pork supplies adequate and the pork cutout stuck below $100/cwt.

Export and domestic demand are broadly stable. Recent ham market volatility highlights how quickly export buyers step in on price breaks, especially with concerns about tighter supplies later in spring/summer.

Supply recovery after short Easter production is limited, with weekly slaughter expected to settle around ~2.4 million head into Memorial Day, 100k head less than March levels.

Fresh pork appears to be in a better position, with loin, butt and rib prices well above year ago. High beef prices are expected to drive more retail features in Q2.

Processed items are largely following the seasonal trend although ham values are expected to have more upside price risk as processors work to fill Easter orders. With Easter a bit earlier this year, the peak in the ham market is expected sometime in the first two weeks of March.

Hog supplies are behaving largely as USDA projected, with slaughter front-loaded into December and early January, up about 2.8% y/y, and a seasonal slowdown now expected into mid-February as the backlog clears.

Despite USDA data pointing to higher hog slaughter and heavier weights in both spring and summer, pork cutout values have held above year-ago levels, signaling demand strong enough to absorb additional supply.

Producers are looking to get more current following two short production weeks during the holidays. Packer margins have been robust, thus supporting higher Saturday slaughter. Spot supply has improved considerably.