Report Snapshot
The recent rally in lean hog futures contract prices has pushed summer contracts (June, July and August 2024) to levels where many producers can lock in forward profits through hedging using futures or options or purchasing government-subsidized Livestock Risk Protection insurance policies.
The rally that began in early January 2024, when the summer contracts were trading in the high-$80s/cwt to low-$90s/cwt, had given producers a little hope that as the summer approached, the staggering losses that the industry had suffered during the previous 16 months would narrow to near break-even levels.
Continued year-over-year (YOY) increases in sow slaughter, higher-than-expected on-farm sow mortality, and lighter barrow and gilt slaughter weights have the supply side of the business looking more bullish. Wholesale pork and slaughter hog prices combined with lower feed prices have improved farrow-to-finish operation margins.
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