Is the annual price peak behind us?

Hog prices normally peak in midsummer. Last year’s weekly average base price peaked at $102.81/hundredweight in late July. It looks like this year’s highest hog price ($90.72/cwt in early June) will hold up as the yearly peak, though there is a possibility of a price jump in the next few weeks. The August lean hogs futures contract is trading at 91.575/cwt. The lowest hog prices are typically at the start and the end of the year.  

Plain  

The yearly pattern in hog prices is driven in large part by the yearly pattern in pork production. Weekly pork production is lowest in the summer and highest in the winter. The six major holiday weeks stand out as having exceptionally low pork production.

Once August is behind us the odds of a new price peak become slim.

Surprisingly, the peak in retail pork prices typically comes much later in the year than the peak in hog prices. The last several years, the seasonal peak in grocery store pork prices has been in October. With time, the higher summer 

During the first half of 2024 U.S. pork production totaled 13.8 billion pounds, up 1% from the year before. USDA/ERS expects pork production to be up 3% this year and up another 1.5% in 2025.

Iowa State University monthly hog profit calculations declined to $14.85/head in June. This was the third consecutive profitable month and the lowest profit since April. ISU cost of production rose slightly in June after 13 consecutive months of decline. Year-over-year hog prices were up $2.54/cwt in June and cost of production was down $11.09/cwt liveweight. So, lower costs contributed far more to profits than higher hog prices.