Pork Cutout Climbing Counter-Seasonally

The pork cutout value continues to climb counter seasonally with last week reaching $113.88 per cwt, up $49.02, or 54.2%, since the start of the year, said the Livestock Marketing Information Center, in a letter to Extension agents called the Livestock Monitor.

However, while the pork cutout is climbing rapidly at an unusual time of year, it’s not at record highs yet, the LMIC said.  Last year, during the pandemic, the pork cutout value reached $115.12 per cwt in mid-May, and the current value is still below record levels of more than $130 seen in 2014.




The strong growth in cutout value has also been seen in primal values, the LMIC said.  Since Jan. 1, belly prices have risen 86.6% to $191.45 per cwt.

Ham and rib values have increased 54.0% and 61.3%, respectively, to $94.26 and $231.29 per cwt, the LMIC said.  Butts, picnics and loins have seen gains as well, rising 52.0%, 43.3% and 33.5%, respectively, to $111.62, $75.35 and $96.57 per cwt.




Through mid-April, weekly pork production has been slightly more than the same period last year by just 0.2%, indicating a tightening of supplies, the LMIC said.  The narrowing of supplies was driven partly by a 1.1% decline in year-to-date weekly hog slaughter through late April.

The slaughter decrease was more than offset by year-to-date weekly hog dressed weights, which tracked 1.3% more than a year ago, the LMIC said.  The latest March 1 Hogs and Pigs report indicated market hog populations were down 1.8%, indicating supplies in the near term will continue to remain tight.

Combining a marginal increase in pork production and lower expected hog supplies was contributing to the rise in pork cutout value leading into the summer grilling season, the LMIC said.




The rising pork cutout value and tighter hog supplies also supported hog prices, the LMIC said.  This year, the National Weighted Average Base Carcass price has risen $38.62 per cwt, or 62.4%, from $61.85 to $100.48 as of mid-April.

Early weaned feeder prices (10-12 pounds) have held strong around $50 a head since the start of the year, the LMIC said.  Typically, early weaned pig prices decline during the summer.

Feeder pig prices (40 pounds) have climbed 48.0% since the start of the year to $99.70 a head, a counter-seasonal rise and the highest price since August 2014, the LMIC said.  The pork cutout and hog prices are being supported by tighter-than-expected pork supplies to start the year.




Fed cattle traded this week at $118 to $120 per cwt on a live basis, down $1 to $4 from last week.  Dressed-basis trading was at $191 per cwt, down $1 to $4.

The USDA choice cutout Wednesday was up $1.51 per cwt at $292.50, while select was down $0.53 at $279.00.  The choice/select spread widened to $13.50 from $11.46 with 103 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.

The USDA reported Wednesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.04 to $1.18 a bushel over the May CBOT futures contract, which settled at $6.86 1/4 a bushel, down $0.09 1/4.

There were four heifer and two steer delivery intentions posted against the Apr live cattle futures contract Wednesday.  None were retendered, and none were demanded or reclaimed.

The CME Feeder Cattle Index for the seven days ended Tuesday was $135.07 per cwt down $0.15.  This compares with Wednesday’s Apr contract settlement of $133.87 per cwt, down $0.32 and May’s $134.97, down $0.90.