Pork Checkoff Industry News

Market has become somewhat disjointed. Futures are at contract lows and the wholesale price index has been steadily declining for the last two month. However, not all pork prices are down. Loin prices continue to hold up and brisket bones have been steadily moving higher.

Hog slaughter was lower than the previous week but for the next 6-7 weeks slaughter should hover around 2.6 million head, helping bolster supply and pressure prices lower. Futures were lower earlier in the week, largely a knee-jerk reaction to the results of the September inventory survey. In the near term, however, wholesale pork prices have been more resilient than markets were expecting.

Hog inventory report to be released 9/28 is expected to show breeding herd down 1.5% to 2% vs. year ago. The reduction may be offset by continued productivity gains but overall supply for next year is expected to be about the same as it was in 2023.

Hog slaughter last week was less than expected, in part because heat and big slaughter before Labor Day resulted in tight spot hog supply. Slaughter may remain below year ago levels next week but eventually it is expected to jump over 2.5m head later in the month and into October.

Belly prices collapsed late in the week, dropping almost 35% from the previous week. A big part of this was the big increase in slaughter but also higher prices at retail and seasonal decline in demand.

USDA currently forecasts per capita domestic supply of pork available down 2.9% from a year ago and at almost the same level in 2024. These are the lowest in a decade.

Wholesale pork prices continue to move higher as some buyers have been caught short. Much of the recent increase in price is due to higher belly prices but loin and ham prices have seen a notable seasonal increase.

For those who had forgotten about seasonality in pork prices, the last few weeks have been a good reminder. Pork supplies declined in Jun/July and early August due to a combination of lower slaughter and lower carcass weights. We estimate that since early May pork supplies are down 9%.

Prop 12 speculation has skewed the market for the last few weeks, initially as fear caused some inventory dumping and then inventory building based on guidance that anything produced before June 30 would be allowed into California through the end of the year.

Hog slaughter has declined from 2.45 million head/week in early May to nearly 2.3m hogs currently. Additionally, hog weights have declined at a faster rate than normal, further reducing spot availability.