Pork Trends - April 19, 2019
Last week the USDA-reported hog slaughter was slightly below 2.4 MM hogs—lower than the previous week, and marginally higher than the same week one year ago. A large, early-spring snowstorm disrupted production numbers in the Midwest last week. In addition, packers are beginning their seasonal pullback by harvesting fewer hogs each progressing week.
The end of April into early May is likely to see some increased market volatility. The Easter holiday usually drives a shift from fresh pork items to hams, especially in the retail channel, so some fresh cuts may experience lower demand. However, domestic and export interest is expected to increase for Cinco de Mayo, Mother’s Day, and then Memorial Day. In addition, reported export sales to Canada and China are strong.
Prices in the loin complex were mixed last week. Boneless loins continued to experience marginal strength, and the bone-in continued slightly lower. Typically, the loin market experiences pricing softness between spring and summer retail ads, so pricing may not strengthen again until early May.
Pork tenderloin prices experienced a slight uptick last week, a likely result of a slight uptick in demand. Seasonally, prices begin to move higher at some point in April, as retail demand picks up for summer grilling season, but it’s all a matter of when retailers are going to start featuring product.
Pork butt prices continued their strong momentum higher last week, due to increased demand across retail, foodservice and the export channels, both for current and out-front needs. Pork butts are one of the most commonly traded pork cuts, so lots of activity is driving increased pricing. Seasonally, there is typically some softness in late April, as retailers reset for major summer holidays.
Trades on both backribs and spareribs continued to surge higher last week. Supply is being reported as tight on most rib items, which is driving price premiums, as buyers seek out last-minute supply heading into the summer months. Demand is solid, as retailers are also beginning to feature ribs in tandem with the warming weather. Rib prices are forecasted higher.
Belly prices continued to surge last week in very counter-seasonal fashion, as demand across most channels is reported as very strong. Exports are expected to be significantly stronger on the horizon, so buyers are loading up sooner rather than later. With the current rally being very counter-seasonal, prices are expected to peak shortly.
The ham market continues to move lower as last-minute Easter demand tapers off. Prices are finding support on the way down; however, processor and export demand is quickly stepping back into the market. Lean trimming prices are considerably higher right now, so it’s likely that processors are buying hams as a lean meat and trim source.
Pork trimming prices continued their strong momentum higher last week. Processors are loading up on raw materials for hot dogs and sausages due to summer grilling demand. In addition, with an increase of exports, there are fewer trimmings available, so buyers are paying premiums to cover their needs.
Higher trades in the picnic complex continued to be amplified by growing exports, combined with strong seasonal demand. Seasonally, prices move directionally higher in April through summer, as grilling season demand picks up for sausages and hot dogs. In addition, some retailers are promoting bone-in picnics for pulled pork offerings as a cheaper substitute for pork butts.