Pork Market Trends: July 2018
After dropping 1% last week, the pork cutout was down 2% this week to $0.84/lb., now down 20% year-over-year. So far this year, the pork cutout has been down the most compared to year-ago levels for the last two weeks at -17% and -20% year-over-year.
All primals except the belly primal decreased this week as bacon demand continues to support belly prices. The belly primal was up 4% week-over-week, while values were lower for loins (-1%), butts (-5%), ribs (-6%), hams (-6%), and picnics (-9%).All primal values are lower than last year, but the ham primal value contribution is down the most on a per head basis with per head value from the ham primal down $12.44 from the same week last year (see chart below).
Heavy bone-in ham values continued to slide this week, down 5% from last week to $0.52/lb. This was down 36% from $0.81/lb. last year (and compared to $0.83/lb. in 2016 and $0.53/lb. in 2015 so putting this week down 29% from the previous 3-year average). Boneless hams also moved lower, with rollout boneless boxed hams down 3% from last week to $1.06/lb., down 26% from last year.
You will see on the ham charts below that bone-in and boneless ham prices normally increase to their summer peak in July, but for the last few weeks, prices have been moving counter-seasonally lower.
After moving sharply higher over the last month, 42% boxed trim prices were down 1.5% from last week to $0.95/lb., up 15% from last year. 72% trim boxed also moved lower from last week, down 3% to $0.97/lb., down 4% from last year.
Weekly estimated pork production was 476.9 million pounds, up 14.6% from the previous holiday week and up 4.7% from last year. Year to date production is up 3.6% from last year with slaughter up 2.8%. Weekly slaughter was 2.285 million head, up 14.9% from last week and up 4% from last year.
Live weights were 279 lbs., down 1 lb. from last week but up 2 lbs. from last year. Dressed weights were 209 lbs., down 1 lb. from last week but up 2 lbs. from last year. After increasing by 1% last week, hog prices dropped 4% or -$3.16/cwt to $74.19/cwt on Friday.
Futures contracts were down from last Friday with the further-out contracts seeing steep drops earlirt this week: July: $79.95 (-$1.43), August: $70.15 (-$5.28), October: $55.30 (-$4.48), and December: $50.40 (-$4.40).