Margins were slightly higher in nearby Q4 over the first half of September and flat further out on the curve as hog futures have stalled out following the recent advance while feed costs hold steady with harvest rapidly approaching. Hog prices have held firm as weekly slaughter and pork production have trailed year-ago comparisons since May although a recent sharp increase in carcass weights suggest that pork production has begun its seasonal advance. Hog slaughter for the week ending September 13 was initially reported above the comparable week in 2024 for the first time since spring but was subsequently revised lower to 2.508 million head, 2.7% below a year ago. Harvest weights on the other hand have moved sharply higher recently as cooler weather, abundant availability of cheap feed, and strengthening margins have encouraged producers to hold onto pigs longer. Tighter supplies through the summer have helped to support the pork cutout,
although increasing production through the fall and winter may begin to exert more pressure – particularly if the upcoming USDA Hogs & Pigs report indicates expansion. The September WASDE report increased planted and harvested acres for both soybeans and especially corn which helped to offset reduced yields from the August estimate as crop condition ratings have moved lower recently, particularly in the Eastern Corn Belt. Corn planted acreage increased a whopping 1.4 million from the previous estimate to 98.7 million while yield was cut to 186.7 bushels per acre from 188.8 last month. Our clients continue adding coverage further out in 2026 with historically strong margin opportunities using flexible price strategies to allow for additional margin improvement over time.
The Hog Margin calculation assumes that 73 lbs of soybean meal and 5.3 bushels of corn are required to produce 100 lean hog lbs. Additional assumed costs include $44 per cwt for other feed and non-feed expenses.
Hog Margin Watch reports are provided by CIH. Click here to see CIH Hog Services.
