While beef has enjoyed a renaissance of sorts among US consumers in the midst of the COVID-19 pandemic, pork prices have only stabilized and partially closed the gap with historic values.
The average of weekly averages of the pork cutout value from the USDA’s Agricultural Marketing Service for the year to date show that packers received more for their pork, on average, during the 2014-2018 period than they did last year or this year.
After the initial shock of the Great Lockdown subsided, the USDA’s weekly average pork cutout value was found to be less than last year and significantly below the 2014-2018 average. At that point, it began an unseasonal and uneven rise and last week was just below the five-year average. From March through June, the pork cutout gyrated from $79.20 per cwt to a low of $53.55 the second week of April to a high of $115.12 the third week of May and back down to a low of $64.40 the first week of July.
From the low, the weekly average pork cutout ground its way higher, surpassing last year three weeks ago and ending last week near the 2014-2018 average and on a path to best it with this week’s average.
BARROW, GILT PRICES ALSO RECOVER
Weekly average barrow and gilt prices in Iowa and southern Minnesota also recovered from their COVID-related lows, although the price jumps have been slower to respond to price shifts for pork.
That the two did not track closely should not be a surprise, a market analyst said, since they are two separate, though related, markets, just as beef and cattle are two distinct markets.
Prior to the pandemic lockdown in March, the weekly carcass base price reported by the USDA’s AMS was tracking closely with last year and well below the previous five-year average. Prices had even begun to turn higher, peaking at $58.28 per cwt the last week of March before dropping to $34.04 the third week of April.
From there, prices struggled to another short-term top of $40.12 per cwt the last week of May before sliding to $28.66 the last week of June.
The market has since ground higher, moving above last year just two weeks ago and dropping in last week at $62.10 per cwt, compared with $45.15 last year and the 2014-2018 average of $66.85.
Simple extrapolation indicates cash prices for barrows and gilts in Iowa and southern Minnesota will surpass the five-year average this week or next, an analyst said, but since prices have been lower than the average all year, they could spend very little time above the line.
FEEDER PIG PRICES SHOW LITTLE COVID EFFECT
Meanwhile, cash prices for 40-pound feeder pigs showed little effect from the pandemic.
Prices have been below last year and the 2014-2018 average all year. They sagged over the summer but were back near previous benchmarks last week aiming to follow the rising trend into 2021.
CATTLE, BEEF RECAP
Fed cattle trading last week was reported at $104 to $105 per cwt on a live basis, up $1 from the previous week. Dressed-basis trading was seen at $164 per cwt, up $1 to $2.
The USDA choice cutout Monday was down $1.62 per cwt at $217.72, while select was off $0.56 at $206.42. The choice/select spread narrowed to $11.30 from $12.36 with 103 loads of fabricated product and 45 loads of trimmings and grinds sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $142.61 per cwt, up $0.38. This compares with Monday’s Oct contract settlement of $140.92 per cwt, up $0.60.