Pig outlook: Lean hog futures in price downdraft
Livestock analyst Jim Wyckoff reports on the global pig industry.
By: Last week, April lean hog futures hit a three-week low amid a steep price downdraft seen over the past week and a half. Bulls have quickly lost their near-term technical advantage. However, there are now stiff technical support levels that lie just below present prices. Cash and fresh pork market fundamentals have also deteriorated just recently. The latest CME lean hog index is down 85 cents to $89.68 as of Feb. 21.
Wednesday’s cash hog index projection is down another 21 cents at $89.47, for the third straight day of a lower index price. Traders anticipate recent weakness in the cash hog market will continue as April futures continue to trade at a discount to the cash index. On the positive side, retailer and consumer demand for pork remains solid. That’s partly due to higher beef prices at the meat counter.
Researcher: China’s pork demand has no more room for growth
There is no more room for Chinese demand for pork to grow in the future, Zhu Zengyong, a researcher with the state-backed Chinese Academy of Agricultural Sciences said. Current demand in China is stable and unlikely to rise further. Given the current price of pork, it is not recommended that companies expand breeding sow capacity this year and they should instead focus on improving the efficiency of breeding sows, he said.
The State Council said it will strictly enforce and supervise pig slaughter and regulate pork production capacity. China’s imports of pork meat and offal shrunk 15.7% last year, a fourth consecutive annual decline, and Zou forecasts imports to further decline in 2025.
USDA Livestock Outlook: February 2025
Pork/Hogs: First-quarter pork production is unchanged at 7.1 billion pounds, while first-quarter prices of live equivalent 51-52 percent lean hogs are raised $1 to $62 per cwt on strong pork demand. Pork production for the year was increased slightly on higher-than-expected dressed weights. Total 2025 pork exports are forecast at about 7.3 billion pounds, up 2.5 percent from last year.
Iowa Senator trying to boost local meat processing capacity
US Senator Joni Ernst is working to remove regulatory roadblocks and increase meat processing capacity by allowing livestock auction market owners to invest in small and regional packing facilities.
Ernst recently introduced the Expanding Local Meat Processing Act, bipartisan, bicameral legislation that would amend the Packers and Stockyards Act to allow livestock auction market owners to hold ownership in, finance, or participate in the management or operation of a meat packing entity. This cap would exclude investment in the top 10 meat packers.
Currently, livestock auction markets are not able to own, invest in, manage, or operate a packing plant or meat marketing business due to outdated regulations in the Packers and Stockyards Act. Ernst has been pushing to remove this unnecessary barrier in the livestock industry since 2022.
NPPC President Lori Stevermer to Senate: Prop. 12 Puts All American Agriculture at Risk
The National Pork Producers Council (NPPC) President Lori Stevermer, a pork producer from Easton, Minn., brought the industry’s point of view to the U.S. Senate Agriculture, Nutrition, and Forestry Committee today through her “Perspectives from the Field” hearing testimony. Stevermer highlighted the top pork industry issue – California Proposition 12.
“We must fix the problems caused by Prop. 12, which has increased farmers’ operating costs, created business uncertainty, and raised pork prices at the grocery store,” said Stevermer. “We stand with farmers and consumers across the country, grateful to have the support of both President Trump and former President Biden in clearly and decisively opposing Prop. 12.”
Other pork industry priorities discussed include the prevention of the growing threat of foreign animal diseases, ongoing market access and trade issues, and employment challenges, including the need for year-round H-2A visas. Click here to read Stevermer’s full testimony.
The next week’s likely high-low price trading ranges:
April lean hog futures--$84.50 to $90.00 and with a sideways bias
May soybean meal futures--$290.00 to $310.00, and with a sideways-higher bias
May corn futures--$4.88 1/2 to $5.10 and a sideways bias
Latest analytical daily charts lean hog, soybean meal and corn futures
Sarah Mikesell
Sarah Mikesell grew up on a five-generation family farming operation in Ohio, USA, where her family still farms. She feels extraordinarily lucky to get to do what she loves - write about livestock and crop agriculture. You can find her on LinkedIn.
25 February 2025
4
minute read