Retail pork prices have been setting record highs, which has been supporting hog prices and leading to a run of positive returns for producers.
“The retail pork price set a new record high of $4.60 per pound in July, beating last month’s record of $4.55,” the Livestock Marketing Information Center said. “July’s price was 1.2% above the prior month and 10.1% above last year.”
These retail values have helped keep the cutout value high. The cutout has in particular seen support from strong belly primal values, which have hit record highs.
“Record retail pork prices and a strong pork cutout value are aiding hog prices (National Base Carcass), which were $105.12 per cwt last week, $3.23 off the high set in late-June but nearly double the price from 2020,” the LMIC said.
Producers have seen much better returns this summer than last.
“Strong hog prices are continuing to support producer returns,” the LMIC said. “Iowa State University’s July estimated returns for a farrow-to-finish operation were $51.41 per head, a slight dip from $62.58 the prior month but much improved from the $21.55 loss just a year ago.”
This has given producers a steady profit run.
“Estimated returns have been positive for the last six months, which have been supported by improved carcass selling prices averaging over $108 per cwt. the last four months,” the LMIC said.
Producers have been profitable despite increased feed costs.
“Feed costs were $113.08 per head in July, which was the highest in nearly eight years when it reached $114.01 in October 2013,” the LMIC said. “Much of the rise in feed costs are due to the increasing cost of corn, which was $59.05 per head, the highest in eight years.”
Analysts and producers are watching for the impacts of this year’s crops.
“Both corn and soybean yields are pointing towards tighter supplies this marketing year, which will likely keep prices elevated,” the LMIC said.