Hog futures rallied at the end of last week fueled on the opinion that consumers may shy away from chicken, as the highly pathogenic H5N2 avian influenza outbreak of the U.S. poultry industry has expanded to a dozen states. The recent outbreak of HPAI in the United States affected mainly turkey and egg-laying commercial operations.
Although no human infections have been detected by the USDA and the Center for Disease Control considers the risk to people from these HPAI H5 infections in wild birds, backyard flocks and commercial poultry, to be low; market analysts still expect U.S. consumers to shift to pork and beef items.
Dennis Smith, Archer Financial Services, wrote in his Friday evening report that “Hogs appear to be a market attempting to change their trend.”
Lean hog futures started its rebound last Thursday with May futures climbing $1.22 to $71.92 and June futures gaining $2.37 to $78.32. The upward trend continued last Friday with most-active June lean hog futures increasing $1.12 to $79.45.
Cash hogs were also reported strong all last week, quoted 50 cents to $1 higher on Friday. Wholesale pork cutout values last week were mixed. Pork cutout value was $69.94 per cwt FOB the plants, up $2.31 from the previous week. At the close of market day last Friday, loins settled lower at $83.26 per cwt, dropping 92 cents. Hams and bellies both finished higher at $58.44 per cwt and $65.20 per cwt, respectively. Wholesale bellies were lower than pork cutout values for the third week in the row.
In other news, the USDA has forecasted the European Union would export more pork than the United States this year due to strong U.S. dollar. The United States has been the leading global pork exporter for the last 10 years.
