Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The Market Update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA NASS and AMS reports. Edited by Mid-West Farm Report.
Cash hogs were lower again last week, dropping $1.10. Belly primals are currently a drag on the cutout price. The pork cutout value averaged $90.93, making it $3.31 lower on the week. Bellies were seeking a bottom as they were $14.59/cwt lower on Tuesday of this week but recovered somewhat on Wednesday.
Wholesale prices are higher than this time last year even with comparable production. Overall pork demand is strong. Export sales to Central and South America have increased due to decreased production in the EU, their usual trade partner. Mexico continues to set records for their purchases of U.S. pork even with a higher dollar and weaker peso. Robust export sales are an indication of a stark reality: U.S. pork is currently the cheapest in the world.
Domestic demand has been gaining as well with pork prices competitive in the protein sector. Harvest has been running 3-4 percent lower than projected since early October.
The week after Thanksgiving often brings the highest weekly harvest total of the year. The hog supply appears current so it will be interesting to see if that scenario plays out this year. Last week’s estimated harvest of 2.293 was 272,000 fewer than the previous week and 394,000 fewer than the same week last year.
