The increase packing capacity in the USA is cutting out profits
Prices on lean hogs and pork cut-outs are slightly declining but the trend is going to last longe, as mentioned in a Genesus Inc. report. According to the data offered by the market, 53 to 54 percent of lean hogs sold last week registered a decrease of prices from 74.25c / lb to 71.63c / lb. At the same time, pork cut-outs have slid from 82-83c/lb range to 77-79c/lb.
"The 5c/lb spread is in the range we should expect in the coming months, considering the current level of hog production and packing plant capacity. Meaning - for producers to get higher hog prices, cut-outs must go higher. We expect they will, over the coming weeks, as hog supply decreases seasonally", explained Jim Long, President-CEO Genesus Inc.
Nevertheless, not even a rebound in prices will bring back the big profits in this sector. "The days of Packer Gross Margins records in the $30 to $50 range per head is over. The increased packing capacity has ended the era of Christmas every day", comments Jim Long.
(Photo source: Pixabay)
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