Weekly Pork Profit Maximizer – Retail Edition


Pork cutout values were notably higher this week but we caution about reading too much into the latest numbers. The supply of pork was sharply curtailed as two major hog processing plants were knocked offline by approaching Hurricane Florence in North Carolina. Smithfield has two plants in the immediate vicinity, the Tar Heel plant with a 32,500 hog/day capacity and the Clinton plant with a 10,000 hog/day capacity.

Hog slaughter for the week was estimated at 2.315 million head, 5.9% lower than a year ago. This represents a shortfall of about 230,000 head vs. what we expected based on the June USDA ‘Hogs and Pigs’ report. Prices for a number of products were higher towards the end of the week and the value of the pork cutout on Friday was quoted at $74.53/cwt, up almost $7/ cwt or 10% compared to where prices were on Monday. The impact was particularly noticeable in items that tend to have a fairly inelastic demand, such as bellies and trimmings.

The belly primal on Friday was up 17% compared to where it was on Monday and the loin primal was up 11%. On the other hand, market supplies of hams have been quite burdensome and the recent shortfall in slaughter offered some temporary support. The ham primal on Friday was $54.69/cwt, 7% higher than where it started the week.