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

  • U.S. pork market has been quite volatile, largely due to the impact of the long holiday weekend on supply but also prospects of higher U.S. tariffs and potential retaliation.
  • Seasonally hog slaughter declines in June, July and early August. Summer temps also negatively impact hog performance, resulting in lower carcass weights. In the near term, this has had a more immediate impact on pork trim but also fresh pork items, such as loins, picnics, and butt.
  • Pork belly prices eased lower towards the end of the week as processors sought to clean up inventories accumulated due to the holiday disruption. Seasonally, belly prices stay well supported into August.
  • The pullback in ham prices has presented an opportunity to export buyers. Spot volume sales last week were very light, suggesting supply is currently moving into export channels and formula trades. Higher prices expected this week.

Full Report

We are currently near the seasonal supply lows, and this is likely to persist for another 3 to 4 weeks. Hog slaughter last week was estimated at 2.371 million head, roughly in line with the same week last year. Our expectation for this week is at around 2.38 million head, slightly above last year as well. However, since the first week of June, hog slaughter has averaged 2.5% below year-ago levels—much lower than the 0.6% reduction implied in the USDA June survey. This shortfall in slaughter, combined with the seasonal decline in carcass weights, has supported the value of the cutout in recent weeks.

According to the June survey, supply during the second half of July and the first half of August is expected to run about 0.5% above last year. In 2024, weekly slaughter during this period averaged 2.41 million head. So far, actual slaughter has consistently tracked below expectations, and it remains to be seen whether this trend will persist into July and August.

The lower seasonal supply is likely to impact the availability and pricing of both fresh and processing-type pork products. Currently, the pork cutout for July is expected to average around $117/cwt—a 17% increase from last year but comparable to 2023 levels. Fresh pork items have performed well due to reduced supply and strong demand, especially given the high prices of competing proteins. Shoulder prices have been particularly strong, driven by consumer demand for value-oriented BBQ options. This combination of value-seeking consumers and lower seasonal supply has also driven up the value of both lean and fat pork trim. The price of 42CL pork trim is approaching $120/cwt, nearly double last year’s level, while 72CL pork trim is up 56% year-over-year. Trim supply is expected to improve in the second half of August as slaughter rises to near 2.5 million head, but in the near term, lower carcass weights are likely to keep trim prices elevated.

While fresh pork and trim have supported the cutout value so far, the single most important contributor has been bellies. More than 60% of the recent gains in the cutout are attributed to higher belly prices. Although belly prices were notably lower on Friday as more product became available in the spot market, the expectation is for prices to remain supported in July and early August. This outlook is based on seasonally lower supply, low cold storage inventories, and increased retail featuring. The primary risk for bellies, and for the cutout overall, is that current high prices may eventually curb demand in the fall, just as pork supply begins to ramp up. Futures prices for Q4 have been very well supported up to this point, but they are vulnerable to a downturn given the big net long position that spec funds are currently holding.

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.