Random Observations on Pork Market

  • Last week travels led us to southern Indiana. Last Tuesday feed mill we visited there was buying corn for $4.65 bushel that day. Owner said big difference from $7.00 he paid for too many weeks.
  • U.S. cash isoweans continue to be low. Last week $12 delivered. This we believe is the longest time prices have been this low, our calculation there has been 20 weeks of prices similar. Breakeven is about $40. At this point no sign of much price appreciation soon. We do expect that by December, lower feed costs, fewer pigs and appreciating lean hog futures will lead to $60 plus isoweans. For sow production losing $30 per head, it can’t be soon enough. The current losses are leading to ongoing sow herd liquidation.
  • U.S. sow slaughter in July was 270,100, a year ago July 237,600. An increase of 33,000. Last year June – August the U.S. sow herd declined 16,000. There is no doubt in our mind the U.S. herd is declining. We expect the U.S. herd will be down at least 100,000 June – August this year. We extremely doubt current USDA projections that the U.S. will produce more Pork in 2024 than 2023 will come to fruition.
  • Last week Packer owned hogs to market averaged in the 271 – 273 lb. range depending on the day. Back in April they were in the 290’s lb. area. We expect Packer owned hog weights have declined due to normal seasonality but also Packer push to keep shackles full in their plants. The low 270’s for Packer owned hogs makes us believe that inventory of hogs could be very current. Although it was hot last week in the Midwest, temperatures from June until now have been cooler than seen in recent years which tells us the current Packer owned hog weight scenario is a bullish sign.
  • A Gallup poll released last week indicates 4% of Americans identify as Vegetarians and 1% as Vegans (5% total). The same poll in 2001 indicated 6% total. Good news vegetarianism isn’t growing maybe even declining. People who identified as Liberals are 9%, Moderates 3%, Conservatives 3%. Men 2% and Women 6%. Pork Producers we bet are 0%. Is it any wonder with only 5% of the population that companies like Beyond Meat have gassed so much money chasing such a small market share. Now as an industry we must focus on the 95% of meat eaters and deliver them predictable better tasting Pork. Give them no reason to prefer tofu.
  • Lower Pork production (-9%) and higher hog prices in the European Union has led to a 17% decline year over year (January-June) in Pork Exports. The EU decline is about 340,000 metric tonnes (January-June). The U.S. Pork exports year to date are up 65,000 metric tonnes. We expect U.S. Pork exports to continue running higher than last year for the rest of 2023. While EU will continue lower from lower pork production and higher hog prices. Currently European hogs are over $50 per head higher than U.S. hogs. Arbitrage.
  • The financial losses in North America and China continue to be large. Financial reports from public pig companies indicate company losses in the multiple millions. These losses are not only a reflection of their own businesses but of the industry as a whole. Many now who experienced the 1998 debacle say this is worse. In our travels all we meet have felt the pain, but they also recognize if lean hog futures are correct from September – April there could be an average further loss of $20 per head farrow to finish. This scenario certainly dampens much optimism and bullishness. Our opinion is we expect hog prices to be higher than the futures indicate with less hogs coming to slaughter December and on coupled with even lower Beef production.


The hog industry has lost billions of dollars in North America and China. We all know what happens in this scenario less pigs. Economic reality in hogs the lower the low the higher the high. It’s not if but when this market takes off. Last Friday U.S. Choice Beef cut-outs $3.17 lb. U.S. Pork cut-outs 93.42¢ lb. A huge difference. As Beef supply continues to plummet in the coming months the Beef price will be higher with lower supply it can’t do anything but pull Pork prices higher. Can’t be soon enough. Is it the dark before the dawn?

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This post was written by Genesus