Two mainstay farm animals have far different value propositions these days. One meat animal is up 23% over the past year. The other is down a whopping 25%.
In May, barrows, gilts, and sows fetched $57 per hundredweight (cwt.). That price was down 7.6% from one month earlier. However, what’s really pinching hog farmers is the price relationship to the same time last year. Last April, pork netted $76.20 per cwt. That means pork prices have dropped 25% in just one year and nearly all hog farmers are losing money on pigs. Some farmers are losing as much as $30 to $40 per head.
As dairy farmers already know, beef prices have climbed significantly. In April 2023, beef reached $171 per cwt., which was 23% higher than the same time last year. When looking over a two-year window, beef values jumped from $118 to $171 for a 53% price movement.
Two different tales
Pork prices had been strong for some time. Following an outbreak of African swine fever in 2018, China’s hog herd was decimated. As a result of that disease outbreak, the Asian nation began importing pork in record volumes as the world’s largest pork producer looked to shore up its domestic market.
All bull runs eventually sputter out. After U.S. pork exports peaked at a record 7.3 billion pounds in 2020, it’s been all downhill. In 2022, U.S. pork exports fell 10% as China rebuilt its hog herd. That’s when U.S. inventories began to build. As a result, pork prices have fallen 25% over the past year.
Inventory is one of the prime reasons beef prices have continued to soar.
Shrinking to the lowest level since 1962, the U.S. beef cow herd stood at 28.9 million head. That was down 4% from the previous year and marked the fourth consecutive year of decline as ranchers culled more heavily due to drought and high feed costs. Overall, there were 89.3 million head of cattle in the U.S., the smallest national herd since 2015.
This strong value for beef also propped up dairy replacement prices even as milk prices began to slide. From July 2022 through April 2023, USDA reported springing heifers ranged from $1,710 to $1,730.