Jim Long Pork Commentary, U.S. Market Continues to Move Higher, March 4th 2024


The U.S. market continues to show signs of strengthening. A welcome sign for an industry devastated by losses that were unprecedented. Some positive indicators.

  • Average Hog Price received last Thursday on 236,977 head was 81.73¢ lb. up from high 60’s a few weeks ago.
  • It appears U.S. slaughter weights have declined. For several weeks current year over year weights higher than prior year. Last week USDA estimates current is now 1 lb. lower. This is positive sign as the only way we declined weights is by pulling hogs ahead.
  • Small pig prices have increased dramatically, real reflection of supply-demand-potential profits. Last week cash U.S. early weans averaged $56.50 and 40 lb. feeder pigs $85.45. Not so long-ago cash early weans were in the 20’s and feeder pigs in the 40’s. The DTN – Agdayta calculation last Friday indicated you could pay $107.25 for a 40 lb. feeder pig. We expect the cash feeder pig price to push towards that number. Buyers of small pigs are having price shock with the rapid price increase and fighting the inevitable direction.
  • Lean Hog Futures continue to increase all summer futures between $102-103 all contract highs. A reflection of some bullish sentiment.
  • Last Friday U.S. pork cut-outs closed at $94.45. A strong price with weekly marketing’s at 2,549,000. Helped by the 10% increase in U.S. pork exports and decent domestic demand. As hog marketing’s decline seasonally the opportunity for higher pork cut-outs isn’t that it will go higher but how much higher. $1.10 – $1.20 – $1.30?

Its obvious consumers are prepared to pay more for marbled pork for its taste. There are no lean Ribs, Bellies or Butts. Loins and Hams have been degraded by our industry’s quest for lean “The Other White Meat”. Our economic challenge is to get Loins and Hams to higher value. Our Farmer Arithmetic if we would take Loins and Hams to Butt price ($1.10 lb.) i.e., 65 lbs. of Ham – Loin per head times 25¢ lb. we could add $17.50 to carcass value. We have been losing money as an industry, why keep doing the same thing over and over when it’s obvious the challenge is to produce pork the consumer wishes to buy. Consumers are voting with their money to pay more for Ribs, Bellies, Butts and Beef. Taste is the driver of demand.

Recently speaking to a former NNPC Director we asked if the director and bureaucrats group went out for dinner on the pork producer paid per diems if they ate Beef or Pork. The answer was mostly Beef. Must be funny when at same time they are discussing pork demand problems, wonder what Loin Task Force orders. Indeed, not sure if these are outliers as we expect many pork producers order steaks when they are out. Then we wonder why pork demand has lost market share. Ask yourself why you order steak rather than a pork chop. Probably taste, it’s certainly not because it’s cheaper.

Europe – Swine

Europe is the world’s largest pork exporter. The amount of pork it has to export has declined as the European industry contracted. It appears pork exports have declined in the 20% range in 2023 compared to 2022. Bound to happen with 2023’s hog production down 13 million from 2022 and 25 million from 2021. Farmer Logic – less hogs, less pork to export. In 2020, Europe exported 6,582 million metric tonnes, 2021 6,407, Jan-Nov 2022 5,049, Jan-Nov 2023 4,040. A decline of over 2 million metric tonnes in two years. In 2023, the U.S. exported 2.9 million metric tonnes. The Europe export decline is equal to 70% (2 million plus) of U.S. exports.

The supply of hogs in Europe doesn’t seem to see any rebound in the near future with the EU swine inventory December compared to year before December indicating hog inventory -0.6% lower.

Is it any wonder U.S. pork exports are tracking 10% higher year to date? If there is any surge in global pork imports the lower supply available in Europe very likely will pull hog prices higher in all major exporting countries. USA, Canada, Brazil, EU countries.

Pork from Genesus Jersey Red Duroc bred to Genesus F-1