Good news is hard to come by

The average retail price of pork during October was $5.043 per retail pound, the second highest ever and only 0.4 cents (0.1%) lower than the record set in October 2022. 

One might think that level of retail price would translate into some very high hog prices; but it hasn’t. The average live price for 51-52% lean hogs marketed in October was $58.08/cwt, down $9.70 from a year earlier. That is the lowest since May and roughly $11/cwt below the cost of production. 

Hog prices have been down for all but the first two weeks of the year. Prices have been down by $10 or more for 39 weeks thus far in 2023.

Iowa State University economists’ calculations of Iowa hog farm profits says producers lost $18.52 for each hog marketed in October. Producers have now had losses in 10 of the last 12 months.

The reason for the contrast between hog prices and retail pork prices is the farm-to-retail price spread. It was a record $4.056 per pound during October, breaking the old record of $3.906 set the month before. The wholesale-to-retail price spread (retailer’s margin) was $3.362 per pound in October, also a record high, breaking the old record of $3.298 set in April. A wide price spread is tough on hog prices.