US hog prices remain high despite slight monthly decline

The European pork market has experienced a decrease in prices as supply increased in August, while US hog prices remain elevated year-over-year.

EU Market Dynamics

The Expana Benchmark Price for Pig Deadweight Grade S in Europe fell to €1,980 per metric ton in late August, marking a €50 decline from the previous month. This drop in price coincides with a rise in pork supply across the EU, as slaughter numbers increased and weights remained consistent with seasonal norms. Despite a steady demand during the summer holiday period, cold storage levels were reported as weak, reflecting a lackluster buying interest both domestically and internationally.

US Hog Market

In contrast, US hog prices, while slightly down month-over-month, showed a significant year-over-year increase of 30.1%, with the dressed price of negotiated hogs at $1.08 per pound. The US market is characterised by barely adequate market-ready hog supplies, largely due to ongoing disease pressures. Additionally, live hog weights decreased by 4 pounds month-over-month in July, aligning with seasonal expectations.

Logistics and Costs

Logistics costs have seen a notable decline, with the composite price for a 40ft shipping container dropping by 12% month-over-month and 56% year-over-year to $2,340 per unit in August. This decrease is attributed to pre-emptive shipping activities in July ahead of August tariff deadlines, leading to a subsequent drop in shipping volumes. The expansion in container capacity has further pressured freight rates, contributing to the ongoing issue of global overcapacity.

Feed and Energy Prices

Feed costs, a major component of livestock production expenses, have also seen reductions. EU wheat prices decreased due to a strong production outlook, while corn prices fell amid robust global yields. Despite these decreases, energy prices in both Europe and the US remained relatively stable, with only a minor decline of less than 1% month-over-month.

Overall, the pork industry is navigating a complex landscape of fluctuating supply, prices, and costs, with regional differences in market dynamics between Europe and the US.

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