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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.
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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.
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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.
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