Pig outlook: Lean hog futures prices trending higher

Analyst Jim Wyckoff shares pig news from around the globe

15 September 2023

4 minute read

By: Jim Wyckoff

North America

Asia

October lean hog futures this week hit a five-week high and prices are in an uptrend on the daily bar chart. That suggests the path of least resistance for prices in the near term is sideways to higher. The latest CME lean hog index is up 35 cents at $86.48. It’s likely hog prices will be supported in the coming month before turning lower into the holidays. High retail beef prices at the meat counter and rising gasoline prices suggest pork may become more attractive to the consumer in the coming months. Hog weights stabilized following the August heat wave, rising 3.3 pounds to an average of 279 pounds last week, though that remains one pound below year-ago.

Weekly US export sales for beef, pork

Beef: Net sales of 6,200 MT for 2023 were down 48 percent from the previous week and 56 percent from the prior 4-week average. Increases primarily for China (2,000 MT, including decreases of 100 MT), Mexico (1,300 MT, including decreases of 400 MT), Japan (600 MT, including decreases of 1,000 MT), Hong Kong (400 MT, including decreases of 100 MT), and Guatemala (400 MT), were offset by reductions for the United Kingdom (100 MT). Exports of 13,200 MT were down 10 percent from the previous week and 15 percent from the prior 4-week average. The destinations were primarily to South Korea (3,700 MT), China (2,600 MT), Japan (2,100 MT), Mexico (1,000 MT), and Hong Kong (900 MT).

Pork: Net sales of 23,100 MT for 2023 were down 12 percent from the previous week and 26 percent from the prior 4-week average. Increases primarily for Mexico (6,300 MT, including decreases of 200 MT), Canada (4,500 MT, including decreases of 700 MT), Japan (4,200 MT, including decreases of 200 MT), South Korea (2,100 MT, including decreases of 500 MT), and Colombia (1,500 MT, including decreases of 100 MT), were offset by reductions for Nicaragua (1,400 MT). Exports of 20,700 MT were down 32 percent from the previous week and 28 percent from the prior 4-week average. The destinations were primarily to Mexico (7,200 MT), China (3,200 MT), Japan (2,400 MT), South Korea (2,200 MT), and Canada (1,800 MT).

US Customs stop shipments of prohibited meat from Hong Kong

Last week, US Customs and Border Protection (CBP) at the Louisville Port of Entry intercepted several shipments containing pork not declared in boxes hoping to avoid detection, according to a press release from the authorities. Between August 20 and August 28, Agriculture Specialists stopped 13 shipments from the same corporation in Hong Kong, heading to the same company in Bellerose, New York. Each shipment contained pork items, some contained pork and poultry items, and one contained pork and other prohibited food. In total 1,104 pounds of pork, 298 pounds of poultry, and 88 pounds of prohibited foods were seized. The receiving corporation was notified about their prohibited shipments and the food was destroyed.

Pork products from Hong Kong are prohibited due to outbreaks of African swine fever, Classical swine fever, and swine vesicular disease in the region. Because of the presence of these three swine diseases, all pork products from Hong Kong are not permitted without the applicable US Department of Agriculture Veterinary Services permits. Additionally, the avian products from Hong Kong are also prohibited because of Virulent Newcastle Disease and Highly Pathogenic Avian Influenza.

USDA lowers meat production and exports

USDA cut its beef production forecast by 40 million lbs. from last month amid a slower pace of marketings during the third quarter. Beef production is now expected to drop 1.35 billion lbs. (4.8%) from last year. USDA lowered its 2023 beef export forecast 160 million lbs. from last month, with shipments now expected to fall 13.8% from year-ago. Those changes resulted in no adjustment to the 2023 average cash steer price, which is projected at $178.50, unchanged from last month but up $34.10 from last year.

For 2024, USDA made no change to its beef production projection, but reduced exports. Beef production is forecast to 6.6% next year, with exports likely to drop another 5.0%.

USDA cut its pork production forecast 105 million lbs. from last month amid “a lower expected pace of slaughter and lighter carcass weights,” though it is still expected to rise 0.6% from last year. The pork export forecast was cut 125 million lbs., though shipments are still expected to rise 7.2% from last year. USDA lowered its 2023 average cash hog price $2.30 from last month to $59.90, which would be down $11.31 from last year.

For 2024, USDA made no change to its pork production projection, but reduced exports. Pork production is expected to rise 0.6% from this year, while exports are still anticipated to rebound 1.5% from this year’s level.