Margins continued to deteriorate over the first half of November from a combination of ongoing weakness in hog prices and increasing feed costs, especially soybean meal. Hog prices have been declining from rising pork production as larger slaughter runs and heavier hog weights have combined to increase output. In addition, while the pork cutout value has held firm relative to previous years, the market has been trending lower seasonally as slowing exports and concerns about domestic demand apply pressure. The government shutdown has finally ended after a record 43 days, with market reports starting to resume including export sales. Year-to-date through September, pork exports are down 9% from a year ago, with declines observed from all major trading partners including a 4% decline from Mexico. Year-to-date pork sales declines of 11% to Japan, 7% to South Korea, 25% to China, and 24% to Canada were also noted. While sales to markets outside of North
America have increased over the last few weeks, particularly for loins, sales of picnics and hams have generally been disappointing. Domestically, SNAP payments are expected to resume although timing remains uncertain. Around 12% of the total U.S. population receives SNAP payments, and the percentage is even higher in three of the four most populous states of New York (14.7%), California (13.6%), Florida (12.7%), and Texas (10.2%). It is assumed that the largest share of SNAP spending on meat goes towards lower priced protein items such as poultry and pork which has raised concerns over domestic ham demand this Thanksgiving. Our clients have benefited from adding coverage
recently 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.
