Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 9/6/2019
LIVE-TO-CUTOUT PORK PRICE SPREAD UNDER PRESSURE

The live-to-cutout pork price spread (or the packer gross margin) continues to trend below year-ago levels. The last three months have been progressively declining. The live-to-cutout spread for July was $25.34 per head which is more than 20% lower than last year. That is an indication that packer demand for hogs is supporting hog prices due to several new hog plants opening in recent years. Typically, the live-to-cutout spread starts to increase around June or July as more hogs come to market and hog prices trend lower leading to improved packer returns. 


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CULL COW VALUES, ARE THE PRICE DRIVERS FINALLY ADJUSTING?

Cull cow prices received by producers have been severely depressed for two years.  Nationally, cutter cows (90% lean) have not broken above $60 per cwt on a live basis since September of 2017.  Starting at the end of July, prices climbed above a year ago.  On a national live basis, last week’s cutter value (90% Lean) was $55.77 per cwt compared to last year’s $50.01 per cwt.


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U.S. MEAT & POULTRY EXPORT UPDATE

Beef and lamb export tonnage struggled in July, with shipments slipping compared to 2018’s by 2% for beef and by 78% for lamb. July’s meat trade data converted to a carcass weight by USDA ERS was released on September 5th, showing that key beef markets that had been sources of strength last year faltered in July. Japan and Vietnam were down from a year ago by 9% and 17%, respectively. U.S. beef sales to Canada continued to struggle and were 15% below a year ago while South Korean volumes were up 7%.


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