Things to Consider….

The latest US Cold Storage numbers reported pork stocks at 406.7 million pounds for November, a decline of 35.1 million pounds or -7.9% from October.  November’s volume of 406.7 million is the lowest reported monthly volume since the summer of 2010, when volume in August was reported at 388.2 million. It has been over 11 years since US pork stocks have been this low.

 The monthly decline can be primarily attributed to a seasonal decline in hams which were offset by rises in other cuts. For reference, total pork in cold storage for October was revised higher from 439.6 to 441.8 million pounds. The latest tally of pork in cold storage is -3.1% or 13.1 million pounds under year ago levels.

     Total hams in cold storage dropped 74.0 million pounds or -49.3% from last reported, with the bone-in variety down considerably more than boneless hams. Hams in cold storage typically decline from the seasonal peak reached in September through to the end of the year. The latest tally of hams in cold storage are up 1.1 million pounds or +1.5% over year ago levels, however are still well below levels recorded in other more recent years for this time. Bone-in picnics declined 280 thousand pounds or -4.4% from October, which are 2.8 million pounds or -31.4% under last year, while the category for Other pork declined 3.0 million pounds or -5.6% from October and are 8.4 million pounds or -14.2% under year ago levels.

     Cold stored bellies recorded a significant jump from the levels recorded for October, up 13.6 million or +117.1% for November, though it's worth noting that October recorded the lowest belly stocks since September 2015. Compared to last year, bellies in cold storage are up 1.9 million or +8.2%. Spare-ribs were up 15.1 million pounds or +22.6% from a month earlier but was more modestly over last year, up +2.4% or 2.0 million pounds higher. Total loins were up 6.4 million pounds or +20.1% from October with the boneless variety up more than bone-in loins, bringing the category 1.3 million pounds or +3.4% over year ago levels. Trimmings rose 5.1 million pounds or +11.6% from October, bringing them 6.6 million pounds or +15.6% over last year, while butts climbed 1.9 million pounds or +12.4% in November which is 592 thousand or -3.4% compared to a year earlier.

  December 28, 2021


Weekly Hog Price Recap

Cash hogs started lower, however national cash recorded improvements mid-week where regional cash went unreported. CME cash improved early on however declined the back-half of the week, with daily moves more moderate than those recorded in cash hogs. Wholesale pork values improved overall however week-over-week declines in hams and bellies weighed US pork cutout $0.64/cwt under the previous week's average.

Canadian market hog values generally improved, supported by the currency rate of exchange and near stable CME cash. Markets derived from lagged base pricing were up the most, with the OlyW 20 up nearly $5.75/hog and the OlyW 21 rose more than $5.25/hog, followed by the BP/TC which improved nearly $4.75/hog. Hog values out of Quebec were up more than $4/hog, while the ML Sig 4 was up more than $2/hog. Ontario hog values were near stable, while Hylife fell more than $3.50/hog. In the US, hog values out of Tyson declined shy of $0.75/hog while JM fell $3.50/hog from week ago levels. 

Weekly Hog Margins

Canadian hog margins were mixed on the week while those in the US weakened further, with rising feed costs weighing on margins. Canadian farrow-to-finish feed costs rose near $3.75/hog, while those in the monitored US region were up more than $2.25/hog from a week earlier. 

Hog margins out of Ontario weakened nearly $3.75 to $19.50/hog losses, while the Sig 4 fell $1.50 to more than $13.25/hog losses and Hylife weakened $7.25 to $11/hog losses. The OlyW 21 strengthened more than $1.50 to shy of $9.25/hog losses and the OlyW 20 margins improved $2 to $8/hog losses, while hog margins out of Quebec improved $0.50 to more than $3/hog losses. In the US, Tyson margins declined $3 to nearly $14.75/hog losses while JM weakened more than $5.75 to $24.75/hog losses from the previous week.

US Regional Margins

  • Tyson: $ (14.69) USD X 1.2873 = $ (18.91) in Canadian Dollars
  • Morrell: $ (24.79) USD X 1.2873 = $ (31.91) in Canadian Dollars

Disclaimer: Commodity Professionals Inc. presents this report as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes only and should not be reproduced or transmitted by any means without permission.  Commodity Professionals Inc. does not guarantee, and accepts no legal liability arising from or connected to, the accuracy, reliability, or completeness of any material contained in the publication.