Pork Checkoff Industry News

Lean hog futures have been volatile in the last three months as market participants try to price the potential impact of tariffs on Mexico and Canada while also recognizing that spot supply is lower than expected.

Slaughter continues to fall short of expectations, and in turn that has limited spot availability across a range of products.

Winter storms impacted slaughter operations and limited processing last week. The decline in slaughter impacted spot market availability towards the end of the week, pressuring prices higher across a range of products.

Hog futures have been volatile, in part due to rush of speculative interest in the last quarter of 2024. Market participants now are looking to see how well pork demand holds up to start the year.

Hogs and Pigs inventory implies higher slaughter starting in the spring and through the end of 2025. Report accuracy has come into question, however, and injected more uncertainty going forward.

Last week hog slaughter was 2.56 million head compared to near 2.7 million for the comparable week a year ago. In the last three weeks, slaughter has been down by almost 500k head y/y. This has significantly impacted spot supply.

The short holiday week tends to create a lot of disruptions for both hog processors and manufacturers. Market will return to a more normal flow in the next two weeks.

Hog slaughter remains constrained, and all indications are that slaughter in the next two weeks will remain well below year ago levels.

Lean hog futures are now trading at contract highs, not just for the nearby market but also for next spring and summer. Hog supply coming to market has been slightly lower than previously expected; however, the key driver has been the higher prices paid for pork bellies, and to a lesser extent, hams.

Hog slaughter finally broke over 2.6 million head but it remains well below expectations. Supply is expected to slowly trend higher and this should help ease some of the price pressures across the complex.