Pork Profit Maximizer

This bi-weekly market update offers a detailed analysis of various products complete with a discussion of what is happening on the foodservice level. Projections on prices and supplies available in the future are updated on each report.

Current Pork Profit Maximizer

Pork Profit Maximizer 5/6/2013

What is the path for US pork exports, prices this summer and fall
 
The March export numbers for pork were dismal, providing further confirmation that soft export
demand in Q1, and lackluster domestic sales, were responsible for the 13% decline in the price of
lean hogs and the 6% decline in the value of the pork cutout. While there is some anecdotal evidence
that export demand may be improving, we need to review what the latest export numbers are telling
us, with an eye to implications for summer and fall pricing.
 
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Pork Profit Maximizer Archive

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Pork Profit Maximizer 4/22/2013

We recently updated our estimates for pork prices through the end of 2013 and in 2014. Download the report from our executive summary as it pertains to hog and pork prices.
 
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Pork Profit Maximizer 4/6/2013

Hog Inventories Larger Than Expected, More Supplies Down the Road
 
According to the latest USDA survey of US hog producers, total hog and pig inventories as of March 1 were 65.911 million head, 1.5% larger than a year ago.
 
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Pork Profit Maximizer 3/23/2013

Pork Market Remains Weak as Exports Pull Back

The IA/MN lean hog carcass price closed on Friday afternoon at $70.57/cwt., almost $2/cwt. lower than what it traded the previous day and about $12/cwt. or 15% below year ago levels. The decline in lean hog values reflects continued weakness in domestic wholesale pork markets and, even more importantly, a marked slowdown in US pork exports. The current lean hog price is the lowest since December of 2010.
 
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Pork Profit Maximizer 3/11/2013

Slowdown in US Exports Makes More will have to be absorbed in the domestic market. Product available in the Domestic Market Futures markets for hogs and cattle have removed.
 
The growth in US beef, pork and chicken exports has slowed down in recent months. While beef exports in January were up, they were in negative territory for much of 2012. Pork exports were sharply lower in January while chicken export growth is notably slower than it was in the first half of 2012.
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Pork Profit Maximizer 2/25/2013

Pork producers were able to dramatically change the trajectory of pork production last fall and the production declines were sustained in January. Total commercial pork production last month was 2.065 billion pounds, 3.9% larger than a year ago. When adjusting for the difference in slaughter days, however, pork output was 0.4% lower than in January 2012.
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Pork Profit Maximizer 2/11/2013

USDA recently announced that it would postpone the release of the Mandatory Pork Price report in real time. The report will continue to be published with a one week delay in order to give packers and processors time to adjust to the new price reporting system. USDA does not currently issue a weekly report based on the mandatory reports. According to USDA, the mandatory pork report will be issued in real time by July per the Congressional mandate that set up the system.
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Pork Profit Maximizer 1/28/2013

Supplies of pork in cold storage remain well above year ago levels although the situation for
specific items differs greatly. Total pork in cold storage as of December 31, 2012 was 554.4
million pounds, 14.4% higher than a year ago and also 13.3% above the five year average.
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Pork Profit Maximizer 1/14/2013

Pork Export Update
 
US pork exports remain key to pork pricing going forward. Exports are expected to account for
close to a quarter of all US pork sales in 2013 and the expectation is for continued growth due
to high prices of competing proteins and steady improvement in the global economic picture. 
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Pork Profit Maximizer 12/31/2012

December 1 Hogs and Pig: Revisions are the story. The latest USDA Hogs and Pigs report was decidedly bearish in its implications for pork supplies and prices at least through the summer of 2013 and likely beyond. 
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Pork Profit Maximizer 12/17/2012

An increasingly larger share of US beef, pork and poultry production now goes to export markets, making trade flows a critical driver for meat protein prices.
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Pork Profit Maximizer 12/3/2012

Econom, Fiscal Cliff and Outlook for the Food Business in 2013
 
The economic picture appears to be improving, with economic growth in Q3 at +2.7%, 700k jobs added in the last four months, higher housing prices, lower gasoline prices and relatively strong equity values. All this has led the US consumer confidence index to hit the highest level in five years. 
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Pork Profit Maximizer 11/19/2012

News this week: "Pork Prices Lower But Likely Not For Long. Wholesale pork prices have succumbed to the seasonal price pressures and moved lower in recent days. The pork cutout closed on Friday at $82.23/cwt, $4.4/cwt or 5% lower than the previous week and $7.9/cwt or 9% lower than a year ago." Download the report to learn more.


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Pork Profit Maximizer 10/22/2012

SPECIAL QUARTERLY EDITION: Steiner recently updated its long term forecasts for all meat protein supplies and prices through the end of 2014. Below is a brief excerpt from our executive summary that outlines our rationale and expectations for the coming years. Download the report to learn more.

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Pork Profit Maximizer 10/08/2012

New this week: "The latest USDA survey of US Hog and Pig operations indicated that pork producers have responded to sharply higher feed costs by curtailing growth plans and also accelerating the number of hogs expected to come to market in the near term." Download the report to learn more.

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Pork Profit Maximizer 09/24/2012

News this week: "There seems to be little disagreement that meat prices will be higher in 2013. Sharply higher feed costs are expected to drive liquidation as producers struggle to bring a margin back in the business." Download the report to learn more.

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Pork Profit Maximizer 09/10/2012

News this week: "Hog prices have collapsed as producers rush to bring more hogs to market. There has been plenty of conversation among market participants and analysts as to whether the recent decline in hog values is a reflection of producers simply pulling ?hogs forward (thus cutting short feed times) or whether it reflects a glut of supply." Download the report to learn more.

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Pork Profit Maximizer 8/27/2012

News this week:  "Lean hog futures have pulled back sharply in the last two trading sessions as market participants worry about pork prices going into the fall. The nearby October Lean Hog contract closed on Friday at $72.375/cwt., almost 350 points or 4% lower than earlier in the week. This was a new contract low." Download the report to learn more.

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Pork Profit Maximizer 8/13/2012

News this week: " The latest USDA supply/demand report confirmed what many analysts had been warning about for a few weeks. The US corn crop has been damaged considerably by extreme drought conditions across much of the Midwest, cutting the projected US corn output by about 20% compared to what was projected earlier in the season."
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Pork Profit Maximizer 7/30/12

News this week: "Lean hog futures were higher this week as market participants were buoyed
by reports of higher wholesale pork prices. The nearby CME August Lean Hog contract closed
the week at $95.2 /cwt, $1.500/cwt higher than a week ago."
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Pork Profit Maximizer 7/16/12

News this week: "Starting in May and through October of each year, the US Department of Agriculture publishes a weekly report on the health and condition of pastures and ranges across the country."
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Pork Profit Maximizer 7/2/12

News this week: "USDA released on Friday afternoon the results of its quarterly survey of US Hog
and Pig operations. While the survey showed that total hog supplies are higher than a year ago, we think that the report also provided a more bullish rationale for prices in late 2012 and particularly 2013."
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Pork Profit Maximizer 6/18/12

News this week: "Nearby hog futures closed lower on Friday but for the past few days both futures
and cash market prices for hogs have been on fire. The nearby July contract was trading around
$84/cwt. in late May but since then has gained almost $10/cwt., closing on Friday at $93.025/cwt."
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Pork Profit Maximizer 6/4/12

News this week: "Cattle and hog futures have bounced back in recent weeks, in part driven by higher prices in the cash market but also seasonal improvement in demand at retail. June hog futures which back in March were trading as high as $100/cwt., declined to around $84/cwt. into early May."
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Pork Profit Maximizer 5/21/12

News this week: "One of the arguments for the continued weakness in the pork market has been
that prices quickly enough to clear the market. While export shipments have been strong, at least
through Q1, lower prices have been needed to stimulate volume movement."
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Pork Profit Maximizer 5/7/12

News this week: "Lean hog futures continued to drift lower in the past week and the nearby May lean hog contract closed at $79.8/cwt., almost 20% lower than what the market was pricing spring hogs in mid- February. Hog futures continue to be pressured by a combination of poor demand at retail, foodservice and export as well as increasing pork supplies."
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Pork Profit Maximizer 4/23/12

News this week: "Beef, pork and poultry supplies in cold storage as of March 31 were reported at 2.073 billion pounds, 1.5% higher than a year ago and 1.1% higher than the five year average. Meat protein inventories were higher despite lower broiler supplies than a year ago."
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Pork Profit Maximizer 4/9/12

News this week: "The total inventory of hogs and pigs as of March 1 was estimated at 64.872
million head, 1.9% higher than a year ago and larger than analyst estimates looking for a 1.7%
increase."
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Pork Profit Maximizer 3/26/12

News this week: "Pork supplies in cold storage were larger than expected and notably higher than
a year ago. Particularly worrying was the sharp increase in the supply of pork trimmings. While
higher export numbers have been skewing the cold storage numbers for some time, the sharp rise
in pork trim stocks coupled with a significant decline in trim values indicates that product is backing
up in freezers."
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Pork Profit Maximizer 3/11/12

News this week: "Summer hog futures are currently priced at around $95/cwt, about $5/cwt lower than where they were two weeks ago. Futures have been negatively impacted by ongoing weakness in the wholesale pork complex."
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Pork Profit Maximizer 2/27/12

News this week: "Statistics Canada released last week the results of its quarterly survey of hogs

and pigs inventories as of January 1 and with that data we now have a more complete picture of hog supplies in North America."
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Pork Profit Maximizer 2/13/12

News this week: "The US Census Bureau released on Friday the latest data on US livestock and poultry exports for the month of December. USDA/ERS will release on Monday its own update based on these numbers but converting them to carcass weight equivalent. Our summary below is based on the product weight data and reported in metric ton (a metric ton is 2,204.62 pounds)."
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Pork Profit Maximizer 1/30/12

News this week: "Steiner recently updated its long term quarterly beef, pork and poultry forecasts for 2012 and 2013. Overall, we modestly increased our forecasts for beef and chicken prices for 2012 and lowered our forecasts for pork prices. Corn prices are no longer trading at the record levels of last summer but current prices remain well above long run averages and thus will underpin significantly higher protein values."
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Pork Profit Maximizer 1/17/12

News this week: "USDA updated on Friday its estimates on US corn use and supply for the balance of 2011 and 2012. On the face of it, the balance sheet (page 2) appears little changed from the previous month and yet markets reacted negatively to a number of key data in both the WASDE report, the grain stocks survey and the survey of wheat seedings."
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Pork Profit Maximizer 1/3/12

News this week: "USDA released on Friday, December 23, the results of its quarterly survey of US hog and pig inventories as of December 1, 2011. The survey results came in close to pre-report estimates and appeared to have little impact on future markets. Rather, much of the focus these days continues to be on pork demand, particularly export demand."
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Pork Profit Maximizer 12/19/11

News this week: "Hog futures broke sharply lower this week as market participants worry that the
upcoming USDA Hogs and Pigs report will point to an expansion of the US hog breeding herd and
producer intentions for larger pork supplies later in 2012."
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Pork Profit Maximizer 12/5/11

News this week: "Corn prices have been trending lower in recent weeks, which has been welcome news for livestock and poultry producers. It was not long ago that producers were looking at 2012 corn futures near $8 per bushel, a price level that was unsustainable for livestock production despite record livestock prices."
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Pork Profit Maximizer 11/21/11

News this week: "US meat exports are on track for a record breaking year in 2011. Beef, pork, chicken and turkey exports for September were a combined 1.372 billion pounds, 203 million pounds or 17.4% higher than a year ago. A large portion of the growth in protein exports came from strong pork exports, particularly to China."
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Pork Profit Maximizer 11/7/11

News this week: "One of the issues debated often in the industry relates to the high price of meat protein vis-à-vis high unemployment rates and uncertainty in world markets. In our view, it helps to take a step back and look at the world around, not just at your town, your state or even your country."
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Pork Profit Maximizer 10/24/11

News this week: "The data on red meat exports released on Friday, October 14 confirmed what beef and pork prices have been showing for sometime - US beef and pork exports exploded in August. In the case of pork, August pork prices hit all time record highs and, at the time, much of the talk in the market centered around the impact of large Chinese (and other market) purchases. It appears that speculation was right on target."
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Pork Profit Maximizer 10/10/11

News this week: "Some of the highlights from the latest hogs and pigs report may be old news at this point but we think the report bears reviewing given the implications it has for pork supplies through much of 2012. Coming into the report there was plenty of speculation as to the response of hog producers to sharply higher feed costs and record high hog prices during the Jun - Aug period."
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Pork Profit Maximizer 9/26/11

News this week: "USDA released on Thursday afternoon its latest ‘Cold Storage’ report, offering a snapshot of the supply of beef, pork and poultry in cold storage as of August 31st, 2011. The results of the survey were generally supportive for meat prices going forward, particularly for pork and chicken. The impact on futures will likely be limited, however, as market participants are more focused on what is happening in outside markets."
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Pork Profit Maximizer 9/12/11

News this week: "The pork cutout has declined sharply in recent weeks and this has caused packers to reduce their bids for live hogs. As packers have pulled back on their bids, producers have seen hogs start to back up in their barns pressuring overall hog prices."
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Pork Profit Maximizer 8/29/11

News this week: "Higher corn prices will continue to pressure hog and pork prices in 2012. Depending on how the corn harvest develops this year it will affect meat protein prices not just in 2011 but 2012 and beyond. The situation is particularly difficult in the case of beef where high feed costs and exceptional drought conditions in Texas and surrounding areas are causing a massive liquidation of the beef cow herd."
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Pork Profit Maximizer 8/15/11

News this week: "USDA issued a particularly bullish August supply/demand report as corn and soybean production forecasts were well below the July estimates and on the low end of analysts pre- report guesses. The August report is always highly anticipated as it represents the first attempt to project corn production based on actual field observations. It was even more so this year due to record high corn prices this summer and speculation that high July temperatures over much of the Midwest likely damaged the crop during the critical pollination phase."
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Pork Profit Maximizer 8/1/11

News this week: "All the talk in Washington last week focused on the possibility of a technical US default and the impact this will have on the US economy, long term interest rates and the outlook for US government spending. It is interesting to note, however, that while equity markets were pressured all week by the default speculation, livestock futures held up quite well." 
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Pork Profit Maximizer 7/18/11

News this Week: "Hog futures have bounced back recently on strong seasonal demand and expectations of limited product availability in the domestic market. Seasonal demand at this time of year is nothing new but markets were rattled somewhat earlier this spring, in part due to extremely wet and cold conditions which stifled grilling demand into Memorial Day."
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Pork Profit Maximizer 7/4/11

News this Week: "The corn market pulls back but livestock profits remain elusive. The USDA
published the results of a farmer survey showing more corn planted than earlier expected. USDA
also issued the results of the quarterly grain stocks survey (as of June 1) which also showed
significantly more corn in warehouses than the market was expecting."
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Pork Profit Maximizer 6/20/11

News this Week: "In previous issues, we have discussed at length some of the main drivers for US meat and grain prices in 2011 and 2012. On the supply side, we continue to see lower meat production levels across the board. The supply situation in the domestic market becomes even more precarious when we consider booming exports of beef, pork and grains and sharply lower imports."
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Pork Profit Maximizer 6/6/11

News this Week: "Beef and pork prices have declined sharply in the last few weeks while broiler prices did not follow the seasonal up in prices we see traditionally at this time of year. The lower prices are welcome news for protein buyers but the long term outlook likely has become even more problematic than it was earlier in the year." Download the report to read more.

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Pork Profit Maximizer 5/23/11

News this Week: "The latest cold storage report showed that by April 30, total stocks of beef, pork, chicken and turkey were 2.094 billion pounds, 10% higher than a year ago but still some 1.2% lower than the five year average. The increase in cold storage inventories is particularly significant given that Easter this year was much later than in previous years." Download the report to read more. 

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Pork Profit Maximizer 5/9/11

News this Week: "In a matter of days we have gone from a raging bull market in livestock, grain and other commodities to talk that the bubble has burst and speculators are about to feel tremendous pain in the coming months. Such talk is not new, indeed it has been mentioned at least three times in the past 12 months as commodities have pulled back only to recover and hit new highs." Download the report to read more.

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