Sharp correction in pork belly prices pressures cutout / hog prices to move lower. Despite and increase in production, prices for other primals remain above year ago levels.
Cash hog prices have come under significant pressure in the last couple of weeks due to a combination of seasonally higher hog numbers and a changing retail picture for pork bellies. In a previous report, we noted the dramatic increase in retail bacon prices and the decline in pork retail futures. Since then, packers have had to significantly lower belly prices in order to keep the product flow moving.