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.

Highlights

  • Hog slaughter was slightly lower than expected last week and two short production weeks will follow due to the upcoming long holiday weekend.
  • Fresh pork prices have been weaker than expected so far this spring. There is an expectation that fresh pork will see better demand after Memorial Day as retailers rotate out of ground beef and chicken promos.
  • Some fresh pork items have already started to trend higher, particularly pork butts and ribs. Loin values continue to provide value while picnic prices have been slow to develop given how much this item depends on exports.
  • Lower tariffs in China are unlikely to help pork muscle cuts much as US still faces a 57% tariff there. However, it will help variety meats, which in the past would have gone to rendering.
  • Ham prices are firm and expected to trend up.

Full Report

Pork Market Situation Key Points

Hog slaughter will decline in the next two weeks and then remain near seasonal lows into early August.

Fresh pork is starting to show improvement, expected to trend higher in June and July, both due to tighter supply but also retailers rotating out of beef and chicken features.

Lower tariffs in China will benefit by-products far more than fresh pork.

Ham prices have started their seasonal march higher into July.  In each of the last three years ham prices in July have been over $100/cwt.

Analysis

Lower Slaughter Expected in Next Two Weeks: Hog slaughter last week totaled just over 2.4 million head, 0.1% below the same week last year and under expectations. We estimate slaughter next week will be around 2.36 million head, followed by a dip below 2.2 million the following week. While the upcoming holiday contributes to the shortfall, it also appears that available supply may be tightening. There is continued talk of disease pressure, notably PRRS and PEDv. Hog supplies appear current, with weights trending lower and now slightly below year-ago levels.

Will Fresh Pork Rebound after Memorial Day?: That’s a distinct possibility, though far from certain. In hindsight, beef and chicken clearly crowded out pork in the retail case ahead of the Memorial Day weekend. Fresh pork prices are currently down by double digits from last year, despite overall slaughter running only 1–1.5% above year-ago levels. In contrast, ground beef and chicken breast—both staples for Memorial Day—are up 13% and 16% year-over-year, respectively. We expect fresh pork to gain more retail traction post-Memorial Day. Early signs of upward momentum are evident in items like pork butts and ribs. Boneless pork loins also appear to be performing better, potentially due to lower slaughter levels. Based on recent trends and prospects for limited supply growth and improved export performance, we’ve revised our forecasts higher for June, July, and August.

China Tariffs Will Help by Products, Pork Cuts Not so Much: The effective tariff on U.S. pork entering China stands at 57%, even after the recent agreement to reduce retaliatory tariffs implemented in April. By contrast, pork from the EU and Brazil faces just a 12% tariff. Given China’s ample domestic supply and lower EU prices, we see limited upside for U.S. pork muscle cuts. However, the tariff reduction should support demand for pork variety meats—such as pork feet—for which there is limited domestic use in the U.S.

Ham Market Trending Higher: It’s always risky to bet against the ham market heading into summer. In each of the last three years, ham prices that appeared stagnant in mid-April surpassed $100/cwt by mid-July. Reduced slaughter and production in late June and July, combined with holiday inventory building and fixed processing capacity, create a predictable seasonal price lift. While sales to Mexico have been steady rather than strong, they remain supportive. With pork supply growth expected to stay limited and higher prices for turkey and beef, ham values are likely to remain firm, driven by both deli demand and year-end holiday interest.

Price Chart

Forecasts

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.