Ron Plain

The retail price of pork was record high in June. At $2.83 per pound, the average price of pork in U.S. grocery stores was 4.9 cents higher than the old record set in September 2001 and 18.6 cents higher than in June 2003. This is especially good news given that commercial pork production during June (1.672 billion pounds) was also a record. Record prices at the same time as record production means pork demand continues to improve.

June 2004 was especially kind to hog producers. The average base price for spot market hogs in June was $77.01/cwt of carcass weight, 21% higher than in June 2003. The farmers' share of the consumers' pork dollar was 36.1% in June. This was the highest for any June since 1997.

The packer margin (35.6 cents) in June was below year-ago levels for the tenth consecutive month. Thus far in 2004, packer margins have been the tightest since 2001. This is surprising given that hog slaughter in the first half of 2004 was 582,000 head more than for any previous January-June period. High slaughter levels typically produce wide margins for packers.

Undoubtedly, a key factor in pushing up pork prices is beef prices. The average retail price of beef last month ($4.173/pound) was the highest ever for June and the third highest for any month. Retail pork prices tend to peak in late summer or early fall. September is the most common month for the peak in price. Unfortunately for producers, the continuing increase in retail pork prices usually benefits middlemen more than producers.