Pork Checkoff Industry News

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.

The market remains highly uncertain. Bellies have been and continue to be a major drag for the wholesale index, accounting for about half of the decline in wholesale prices. With large inventories and expected lower California demand, the price upside risk for bellies is lower than in previous years.

Prop 12 has end users in California depleting inventories of product that will not be compliant by July 2. This is having a negative impact on spot pricing.

Plenty of conversation in the market about producers suffering deep losses and looking to liquidate sows. IA State model shows average loss of $34/head in Q1.

April 24, 2023 - There has been little movement in the pork market as supply continues to outpace earlier estimates and market participants are now pricing a much weaker demand environment for the summer.

With little improvement in the spot pork market, hog futures continue to slump. But risks are increasing that the market has overshot its mark and prices may snap back.

Lean hog futures have declined by more than 10% in the last few days due to ongoing demand uncertainty this spring.