SOME wild gyrations in the pork cutout last week led hog prices lower on the cash market.
While the overall carcass value held steady at $94.30/cwt., prices for bellies fluctuated more than $14 through the course of the week.
Although trading right around $14.59 for Oct. 18-24, bellies fell $5.74 last Thursday. It was the second time during the week that the market saw a shift of nearly $6/cwt. The primal topped out at $139.12 on Oct. 21 before dropping to $132.94 the following day and ultimately settling at $124.53 last Thursday.
What's interesting, however, is that loin prices gained $3.36 over the course of the week, reaching $99.34/cwt. last Thursday. The market is starting to wonder if strong beef prices and demand will spill over into the pork sector.
In a sense, this makes a lot of sense: A trip through the grocer's meat case might lead a savvy shopper to view a center-cut pork loin as the best bargain in the store — looking very attractive, from a pricing perspective, next to steaks and chicken breasts. However, loin prices haven't firmed all that aggressively yet, so the possibility of upside potential exists.
In recent weeks, most analysts have talked about the battle for 2014 market share as primarily being a fight between beef versus chicken, which seems to concede that the pork industry is a non-factor. That might be the case, but the industry appears to have an opportunity to sell something other than bacon and to get consumers excited about eating pork.
While belly prices shifted wildly and loin prices firmed, the overall carcass value held steady, moving in a range of $93.49-95.65 during the course of the week.
Cash hog prices sputtered last week, with the eastern Corn Belt base price coming in Thursday at $86.58/cwt. on a weighted-average basis, down nearly $2 from last week. The western Corn Belt average dipped nearly $2.50, settling at $85.73 last Thursday.
With hog prices falling, the hog:corn ratio dipped to 19.82 last Thursday. A ratio above 20 is considered an indicator of a stable industry, and last week marked the first time in several months that the indicator fell below that threshold.
Weekly slaughter through last Thursday averaged 431,000 head per day, roughly 2,000 head per day fewer than the previous week and the same week last year. Total year-to-date slaughter is roughly 1.3% smaller than last year.