Last Friday U.S. Pork Cut-out value closed at $1.2086 /lb. First time we have gone over $1.20 in several years, a real reflection of strong domestic and export demand for Pork. Also last Friday, July lean hog futures closed at $1.16.5 /lb., a new life of contract high.
With 53-54% National average hogs $1.1168 /lb. it’s not hard to believe the hog price will continue to get stronger in the coming weeks as seasonal hog supply decline and lower weights will cut pork supply.
Still appears to be some serious PRRS and PED breaks ongoing. It appears some of these PRRS breaks are quite devastating with sow death loss, abortions and other pig losses.
The latest weekly U.S. sow slaughter 58,663 heads. This is at a level that would indicate next to no sow herd liquidation ongoing.
We are not aware of any new sow barns under construction in the U.S. Some talked about but that isn’t construction. We ask you as a reader, if you know of any let us know. We will report sow numbers if there are any in our next commentary. (we will protect details, email us at firstname.lastname@example.org).
Building costs will be a factor re new construction. We are told in Midwest a 2400 finisher is now $425 per space. It was $325-350 not long ago. Lumber, metal, concrete, labor has all gone up in price. We haven’t heard recent sow barn construction cost but expect it has increased 30% also.
September corn closed Friday at $5.73 a bushel down from contract highs on May 7th of $6.54 a bushel. Still extremely high. It appears crop is mostly planted and many areas reporting things looking better with rain and warmer temperatures. (Probably a big reason September has dropped 75¢ a bushel).
The Pork Market Price should continued to be supported by the strong Beef Cut-outs. Choice Beef closed Friday at $3.25 /lb., Pork Cut-outs $1.20 /lb. You don’t need to be a famed ag-economist to calculate the huge price difference. We expect Pork Cut-outs are being dragged higher by Beef. What is interesting is hamburgers taste and flavor is enhanced in many food service instances by bacon. Of course, pork bellies are $2.58 /lb.