The U.S. hog market is experiencing an unprecedented slump, with prices continuing their long drift from summer highs as weak demand overshadows supply fundamentals in ways industry veterans say they’ve never witnessed before.
Dave Delaney, livestock marketing specialist at EverAg, joined Agritalk to discuss the deteriorating market conditions that have left both producers and packers struggling.
A Historic Market Anomaly
According to Delaney, the market’s drop marks a puzzling break from historical norms. Earlier this year, expectations of tighter hog supplies led many to anticipate higher cash values through the summer. But even when hog slaughter tightened between June and September, the anticipated price rally never arrived.
“That’s the first time in my 41-year career history that we didn’t get a bump in cash or cutout due to lower numbers,” Delaney says.
The Demand Problem
When asked what derailed the market, Delaney points straight to consumption.
“Well, you talked about the bad news and I think there’s more to come, but it’s a six-letter word and it’s demand for pork,” Delaney explains. “We’ve seen demand just spiral lower, whether it’s in the retail sector or QSR restaurants. It is continuing to go south and we need to stop it. The per-capita consumption among Gen Z’s is about 5.8 pounds of pork per year.”
Delaney stresses that demand headwinds extend well beyond younger domestic demographics. Export competition has mounted, while dietary perceptions at home are weighing on value-added cuts.
“We’ve got China, for the first time in my 41-year career history that I’ve ever heard, exporting pork out of that country,” Delaney says. “We have a lot of pork around the world. We have a lot of chicken around the world that’s certainly becoming very competitive and a better choice for the consumer. The MAHA movement has not helped us here on the pork side. The word processed is kind of a taboo word.”
At the consumer level, grocers have also been slow to discount pork at the meat case. Delaney notes a recent visit to his hometown grocery store during National Pork Month where bacon was still priced at $8 per lb., with zero pork products featured on promotion.
Supply Rebounds as Weaned Pigs Tumble
While demand falters, pork supplies have quickly bounced back from late-summer lows. Improvements in herd health and pig survival rates have injected more volume into the market than anticipated.
The sharpest shock has shown up in the weaned pig market, which Delaney described as a severe industry downturn.
“If you look at look what our weaned pig market’s done since we last talked — last week it was under $20 for a weighted average. There’s guys selling pigs for $10 to $12. The last time we talked, they were $55 to $60,” Delaney says.
With input costs climbing and live hog revenue falling, Delaney warns that the sow herd is simply not downsizing fast enough to restore profitability.
“I can tell you that we are not contracting the sow herd enough,” Delaney says. “We’ve got some producers that are 37 PSY in good, healthy herds. Boy, they’re kicking out a lot of numbers. So, unfortunately, not a lot of sows going to town yet.”
Can Low Prices Cure Low Prices?
With fundamental headwinds mounting, how much lower must lean hog futures slide before the market finds a bottom?
Mike Minor of Professional Ag Marketing notes the market has arrived at a point where cheap prices will have to do the heavy lifting.
“It’s difficult because at this point, I hate to even say it, but low prices are going to have to cure low prices,” Minor says.
Minor pointed out that supply has erased its earlier deficit, particularly as hog weights climb.
At the same time, weak wholesale cutout values offer little relief. Minor notes packers and processors “can’t turn on demand yet domestically or export. They’re both hurting.”
With seasonal price drops on the horizon, moving excess pork into cold storage makes little financial sense. “It’s the wrong time of the year to try to store in cold storage because it’s going to get cheaper in a little bit. So we’re stuck in between a rock and an impossibly hard place,” Minor says.
Still, Minor sees one potential silver lining: retailers are finally starting to feature cheaper pork cuts to drive foot traffic.
“And what we’re looking at now is featuring going up. The retail stores are saying, ‘Guys, pork is cheap. Go buy this stuff,’” Minor notes, adding that promotions are picking up across loins and other staple products. “It’s getting cheap enough now that they’re trying to feature it and hopefully low prices can cure low prices here very soon.”
Until lower wholesale prices drive significant clearance at the grocery case or the breeding herd meaningfully contracts, market watchers advise producers to prioritize risk management and protect downside exposure.
Looking Ahead
As harvest season approaches and manure application begins, biosecurity concerns add another layer of uncertainty to an already troubled market.
For producers looking to protect themselves, Delaney recommends using insurance products rather than straight futures or options to manage risk in the current environment.
