Pig outlook: Lean hog futures prices trending up

Livestock analyst Jim Wyckoff reports on global pig news

26 July 2024

4 minute read

By: Jim Wyckoff

North America

August lean hog futures prices this week hit a six-week high and prices are trending higher on the daily bar chart. The bulls have the technical advantage to suggest more price gains in the near term. Fundamentally, the cash hog market continues to strengthen. The CME lean hog index is up another 69 cents to $90.77 as of July 23 – the eighth straight daily gain and the largest increase since April 11. The pork cutout firmed $1.26 to $104.76 on Wednesday, the highest since Aug. 24 of last year. August lean hog futures recent rally implies strength at least through the contract’s mid-August expiration. However, some analysts expect price weakness into the fall as US pork production rises on a seasonal basis.

Latest USDA and other news regarding the global pork industry

Weekly US pork export sales

Pork: Net US sales of 30,200 MT for 2024 were up 28 percent from the previous week, but down 19 percent from the prior 4-week average. Increases were primarily for Mexico (7,700 MT, including decreases of 800 MT), South Korea (6,400 MT, including decreases of 300 MT), Japan (4,500 MT, including decreases of 400 MT), Colombia (3,600 MT, including decreases of 100 MT), and China (2,100 MT, including decreases of 100 MT). Exports of 32,900 MT were up 3 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Mexico (13,200 MT), Japan (5,000 MT), China (3,900 MT), South Korea (2,700 MT), and Canada (2,100 MT).

Canada is a top five destination for both US beef and pork exports

However, shipments are sometimes slowed by regulatory issues. The recent transition to the Public Health Information System (PHIS) Export Module was intended to reduce paperwork and simplify the export process. But Courtney Heller, U.S. Meat Export Federation (USMEF) director of export services, says some documentation obstacles persist for U.S. exporters. Heller adds that because the food safety and inspection systems in the U.S. and Canada are so similar, red meat trade between the two countries could be further streamlined. USMEF is working with industry partners such as the Meat Institute to develop recommendations that could simplify regulatory processes and help bolster U.S. exports to Canada.

Last year US pork exports to Canada totaled nearly 220,000 metric tons

That makes Canada the fourth largest market for U.S. pork, with export value topping $875 million. Through May of this year, pork exports are slightly below last year’s pace in volume (85,500 MT) and steady in value ($338 million). U.S. beef exports to Canada totaled 103,500 metric tons in 2023, ranking fifth among U.S. export markets, with export value also totaling about $875 million. Through May of this year, beef exports are up 8% in value ($353 million) despite a 5% decline in volume (just under 40,000 metric tons).

Massachusetts’ Q3 pork law survives industry court challenge

A federal judge on Monday rejected an industry-backed bid to block enforcement of a Massachusetts law banning the sale of pork from pigs kept in tightly confined spaces, saying a federal law governing slaughterhouses does not preempt it. U.S. District Judge William Young in Boston rejected arguments by Missouri-based pork producer Triumph Foods and out-of-state hogs farmers that the state law conflicted with a federal law regulating slaughterhouse inspections. The pork producers argued the Federal Meat Inspection Act preempted the state's law because it created additional, different requirements on how pigs are to be handled than the federal law provided. But Young said Massachusetts’ law does no more than ban the sale of non-compliant pork meat and does not regulate how a slaughterhouse itself operates. This ruling represents a significant victory for animal welfare advocates and supporters of the Massachusetts law. However, it also highlights the ongoing legal challenges faced by state-level animal welfare legislation in the context of interstate commerce and federal regulations.

China to probe EU pork for anti-dumping using sampling method

China has put three companies from the European Union at the center of its anti-dumping investigation into pork products from the bloc. Beijing has chosen Danish Crown A/S, Vion Boxtel BV, and Litera Meat S.L.U. — the top three exporters of pork products in the region to China — to determine if dumping has occurred and assess the damage to the domestic sector, the commerce ministry said. The investigation, which began June 17, will look into pork and its by-products imported from the EU after the bloc decided to impose anti-subsidy duties on Chinese electric vehicles.

China’s June pork imports continue to lag sharply from year-ago

China imported 90,000 MT of pork in June, up 12.5% from May but 33.5% less than last year. Through the first half of 2024, China’s pork imports totaled 520,000 MT, down 45.3% from the same period last year.