Things to Consider…. Renewed strength in cash hog markets and lean hog futures has been a result of a strong pork market which has now surpassed the record highs registered in 2020 which was the result of pork processing plant closures and delays in product availability. As illustrated by the USDA cutout graph 2021 pork value gains have been nearly linear with positive movement starting in January and carrying forward to the highs registered in early June. Although certain cuts like loins have not surpassed 2020 other parts of the carcass have made tremendous gains recording unseasonal highs earlier in the year than normal. In recent days, cut-out has shown signs of reaching a potential top for the year but prices remain well above the 5-year average. So far in 2021 there have been a few disruptions in Canadian slaughter levels, noteably in May however US processors have been successful in keeping the chains moving and capacity to near the allowable maximum relative to supply. With Canadian slaughter levels expected to maintain similar levels to 2020 and US levels tracking between 2019 and 2020 levels, capacity (like previous years) is not projected to be a major bottle neck to pork production once into the 4th quarter. With weekly capacity south of the border now over 2.700 Million and Canadian capacity surpassing 450,000, slaughter projections for late in 2021 are not expected to test capacity providing underlying support to the overall market and meat price. Markets will remain volatile however a firm tone is expected to continue through the summer months.
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