The retail pork price set a new record high of $4.60/lb. in July, beating June’s record of $4.55/lb., the Livestock Marketing Information Center (LMIC) recently reported. July’s price was 1.2% above the prior month and 10.1% above last year.
LMIC noted that strong retail pork prices have supported the cutout value, which recently reached $125.23/cwt., the highest value since mid-June when it reached $134.13. The cutout has been supported by a strong belly primal value, which reached a record high last week of $233.78/cwt., LMIC added.
At the same time, LMIC said marginal strength in the loin and picnic primal values of $116.42 and $96.18/cwt., respectively, has also supported the cutout value.
The record retail pork prices and a strong pork cutout value are aiding hog prices (National Base Carcass), LMIC noted, which reached $105.12/cwt. during the first week of August. This was $3.23 off the high set in late June but nearly double the price from 2020.
LMIC said the strong hog prices are continuing to support producer returns. Iowa State University’s July estimated returns for a farrow-to-finish operation were $51.41/head, a slight dip from $62.58 the prior month but much improved from the $21.55 loss just a year ago.
“Estimated returns have been positive for the last six months which have been supported by improved carcass selling prices averaging over $108/cwt. the last four months,” LMIC noted. “July’s carcass selling price was $109.08/cwt., with a breakeven price of $86.34/cwt.”
These returns have come even as feed costs were $113.08/head in July, which LMIC said was the highest since they reached $114.01/head in October 2013.
“Much of the rise in feed costs are due to the increasing cost of corn, which was $59.05/head, the highest in eight years. Soybean feed costs have been averaging around $19.00/head for the last six months, the highest since early 2015.”
According to LMIC, both corn and soybean yields are pointing towards tighter supplies this marketing year, which will likely keep prices elevated.
“Higher corn and soybean prices could potentially offset any strength in hog prices and limit producer profitability in the near term.”