The U.S. pork sector has been experiencing low demand, and exports have been unable to absorb the extra supply. Weights should be coming down and inventory numbers falling at this time of year, but neither is occurring. What does this mean for U.S. hog producers? How important is it to lock in prices? Will waiting to lock in result in big losses this fall?

David Williams, director of global protein for Informa Economics IEG, and Adam Speck, commodity market analyst for IEG, provided their view on the current state of the industry during a special presentation Thursday, June 7, at the World Pork Expo in Des Moines, Iowa.

 Market Recap

August live cattle futures were mixed this week. Contracts closed lower Monday at $102.45/cwt., rose to $104.575/cwt. by Wednesday’s close, but then closed lower again Thursday at $104.15/cwt.

August feeder cattle futures followed the same trend. Nearby contracts closed lower Monday at $144.85/cwt., rose Tuesday and Wednesday, but fell Thursday into a lower close of $146.075/cwt.

The Choice and Select beef cutout closed lower Thursday at $226.41/cwt. and $203.41/cwt., respectively.

While July lean hog futures were mostly lower this week, gains on Wednesday helped offset some of the losses. July contracts closed lower Monday and Tuesday at $77.925/cwt. and $77.025/cwt., respectively, but finished higher Wednesday at $79.95/cwt. However, the losses continued again on Thursday, with contracts closing lower at $79.45/cwt.

Pork cutout values were mostly higher this week. The wholesale pork cutout closed higher at $79.03/cwt. Loins and hams were higher at $77.38/cwt. and $60.43/cwt. Bellies climbed to $128.65/cwt., up from $119.86/cwt. the prior week.

Hogs delivered to the western Corn Belt were higher, closing Thursday at $72.78/cwt.

The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price on June 1 at $1.21/lb.

According to USDA, egg prices were steady, with a steady to weak undertone. Offerings and supplies were mixed. Demand was light to moderate in the Midwest, moderate to instances light in the South Central, moderate in the Northeast, moderate to fairly good in the Southeast and California.

Large eggs delivered to the Northeast were unchanged at 83-87 cents/doz. Prices in the Southeast were lower at 86-89/doz. while prices in the Midwest were lower at 75-78 cents/doz., respectively. Large eggs delivered to California were lower at $1.41/doz.

For turkeys, USDA said the market was steady. Offerings have been light to moderate and demand has been light. Prices for hens and toms were unchanged at 76-84 cents/lb. and 76-86 cents/lb., respectively.