Steiner and Company produces the Profit Maximizer report on behalf of National Pork Board based on information we believe is accurate and reliable. However neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.


  • Hog futures remain under pressure on uncertainty about outlook of processing items (hams, bellies, trim) this summer. Belly market appears to have more risk given slowdown in foodservice sales. Lack of frozen inventory continues to impact export markets, however.
  • Ham prices have been volatile, largely reflecting export activity. Following three weeks of poor export sales to Mexico in May, ham values trended lower and under $80/cwt. But it took one big sales week for spot market to get cleaned up and prices to push higher. Lower slaughter/production will help underpin ham values this summer, especially if export demand holds up.
  • Loin availability remains limited on robust domestic sales. Some of this is seasonal as retailers focus on grilling items. Availability will remain limited through mid-July but should see notable improvement by August.

Full Report

Summer hog futures have given back all the gains made earlier this spring. July lean hog futures  traded as high as $111/cwt by mid April but since then are down by more than $14/cwt (-12.6%). As we look to understand the reasons for the shift, one thing stands out (see middle chart) – hams and bellies have failed to contribute to the overall value of the cutout. Given the trend of the past four weeks, market participants have adjusted down the premiums built into the summer contracts. Since April 15, the value of the ham primal is down  $4.7/cwt (-5%). The decline has contributed $1.2/cwt to the overall decline in the value of the pork cutout. The value of the belly primal during this time has also declined from $147/cwt to $130/cwt, a 9% decline. The lower value of bellies subtracted $2.2/cwt from the value of the cutout during this period. The overall value of the pork cutout at $102 is lower than where it was in mid April, far from the expectation of higher prices into Memorial Day.

Yes, fresh pork prices have been higher, which was part of the argument for higher prices in late spring and summer. But the decline in the value of hams and bellies has more than offset the increase in fresh pork prices. Let’s consider these two items.

Hams: It has been a bit of a roller coaster since early April. Just after Easter, we saw three weeks where Mexican buyers and exporters to Mexico took advantage of the post holiday lull in demand to book a significant amount of product. That helped clean up spot availability for a period, pushing the ham primal value from $74/cwt in late March to $96/cwt by April 10. The problem is that since then sales to Mexico have been quite uneven, resulting in a lot of volatility. During the last week of April and first two weeks of May, total sales to Mexico were 17,455 MT. During this period prices dropped under $80/cwt. Back in late March and early April, average weekly sales were over 25,000 MT per week, resulting in ham values over $90/cwt despite high slaughter. Will Mexico be back buying product in June and July at some of the lofty levels current futures imply (+$90/cwt)? That’s the big question that futures markets are pondering. Last week Mexican buyers stepped in and booked over 21k MT, which explains the rally this week. Whether that is sustained is another matter.

Bellies: This is something we flagged a while back, especially with growing signs of a slowdown in foodservice sales. Of all the pork items bellies have the most exposure to foodservice. Except for a brief rally back in April, belly prices have been trending sideways for three months. Will there be a rally this summer. The chart above shows the change in the value of the belly primal from the third week of March to mid July. Most years prices go up, but not always. In 2019 business was slow and per capita availability was high. Belly prices were down into the summer. Last year prices were extremely low in April and May and this “bought” a bunch of retail sales in July and August. It also helped the change in Prop 12 rules regarding inventories. Currently futures still are pricing a 25-30% increase in belly values by mid July. It is not a particularly big increase based on the last 15 years. But it’s not a guarantee either.

Price Chart


Steiner Consulting Group produces the National Pork Board newsletter based on information we believe is accurate and reliable. However neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.