Swine Cutout Values Decline Due to Increased Supply and Lower Fat Trim Prices

Pork cutout values have fallen short of expectations this spring as the supply has exceeded forecasts, according to the Daily Livestock Report. The USDA has revised projections for pork production upwards, driven by an increase in carcass weights. Since early April, barrow and gilt weights have risen by 1.5% compared to last year.

The report attributes the increased pork supply to lower feed costs and a livestock shortfall, prompting producers to maximize pounds per head. This has led to a significant increase in fat trim from hogs. The rise in supply has coincided with a sharp decline in the value of fat trims. Since mid-April, the price of 42CL pork trim has decreased by 33% year-over-year, significantly impacting the overall cutout value.

The decline in pork trim value has subtracted $1/cwt from the cutout value, reflecting broader market trends and contributing to the overall reduction in pork cutout values this spring.