Pork Market Situation and Outlook For Q1 and Beyond

Pork Market Situation and Outlook For Q1 and Beyond

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Steiner and Company produces the Profit Maximizer report on behalf of National Pork Board based on information we believe is accurate and reliable. However neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.

Full Report

Last week pork production was estimated at 470 million pounds, 4.7% lower than the comparable holiday-shortened week a year ago and the lowest weekly slaughter since early July. The decline was expected, however, the magnitude was larger than earlier estimates. It appears producers sought to get ahead of the holiday disruption by accelerating slaughter and production in the previous three weeks. Indeed, pork production during the first three weeks of November averaged 574 million pounds per week, 2.5% higher than a year ago. Only once this year, in January, did pork production reach 574 million pounds. The cutout value at the time dropped to $90 per cwt and coincidentally this is also where the cutout traded in mid November.

The supply situation, however, is likely to change considerably in the next few weeks and retailers and processors would do well to consider the implications. First, holiday disruptions this year are likely to be more significant than a year ago. Last year, Christmas Day and New Year's Day fell on a Wednesday. Packers ran full production on Monday, then short production on Tuesday, no production on Wednesday, followed by big production runs Thursday through Saturday. This time around, however, the holidays will fall on a Thursday. This will result in limited production mid week and, with the weekend approaching, packers are less likely to run full production. Processors are similarly likely to run lighter schedules during this period.

Implications for Retailers

Fresh pork markets remain well supplied for the moment. Even as slaughter drops under 2.6 million head in January, loin, butt and picnic prices are likely to remain rangebound. It is quite telling that the price of boneless center cut loins, strap on or strap off, has traded in a very narrow range for much of the year regardless of seasonal production. Pork butt prices saw an uptick in recent days and could see short term support due to holiday demand. Similarly, picnic prices seasonally stay supported through December before easing in Q1. As for spareribs, high beef prices should keep a firm undertone. Seasonal year-end declines are still expected, however, not as pronounced as normal. There is more upside price risk for ribs in 2026, particularly in Q2, as high prices this fall likely limited inventory building.

Implications for Processors

We think there will be significantly more volatility for processing items, be this hams, bellies or trim. Ham prices have been trending lower in recent weeks as slaughter has increased. It is also possible that high summer prices tempered retail sales for the holiday season. While a modest bump in price is possible this week and next as processors run full production and pick up last minute orders, we think the upside is limited and prices are likely to find a bottom after Christmas. Last year ham prices surged counterseasonally in December due to exporters building positions ahead of potential tariffs on Mexico. The threat of tariffs created significant volatility in Q1. This coming year, relatively low late December and early January prices, combined with an expected year-over-year decline in slaughter, should allow for a more robust and steadily rising ham market through early March. As for bellies and trim, overall demand remains strong, driven by foodservice operators capitalizing on lower priced proteins. QSR demand is usually slow at the start of the year. Combined with slaughter above 2.5 million head, this should keep prices in check. Past January, however, we think prices for processing items will carry more upside risk given limited supply growth, seasonal demand and high prices for competing proteins.

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