Cash Strategist 7 24 2024

Pork market outlook shows demand uptick

Hog futures prices have largely trended lower over the past few months but are still well above the lows made last winter as demand through the first half of 2024 has been good both domestically and globally.

Prices peaked in 2021-22 following the COVID-19 pandemic just above $123 and came back down starting in 2023 due partially to the return of pre-pandemic spending habits that favored alternatives to pork. A low was made in January at $64.57, with prices now trading near the middle of that range at roughly $90.

Pork cutout values through the first quarter of 2024 have also rebounded nearly 10% from the same period last year, though some of this could be attributed to inflation. Like hog futures, cutout values rose in 2021-22 due to the effects of government response to the pandemic, which contributed to elevated demand for retail pork cuts.

As mentioned previously, demand has been the number one reason for this rebound in prices, as global exports through May this year had a total value of $3.6 billion, up 7% from the same period last year.

On a volume basis, exports totaled 1.292 million metric tons through May, a 6% increase from last year. Mexico, by far the United States' largest pork buyer, has increased import volumes by 7% from 2023, accounting for 480,200 metric tons of the nearly 1.3 million...