While more influenza cases have been found across the US and in the EU, so far the disease has proved to be less lethal than earlier feared. Hog futures on Tuesday closed higher on the day, with the July contract gaining some 112 points and almost all other contracts settling higher. The only exception was the nearby May contract which continued to drift, reflecting the weakness in the cash market. USDA reports show that cash hog values remain soft as packers contend with a pronounced decline in domestic and export demand. IA/MN lean hog carcass prices were quoted on Tuesday at $50.88/cwt (wt. avg. price), 95 cents lower than the previous day and some $7.9/cwt lower than a week ago.

Current cash hog prices are a down as much as $26/cwt or 33 per cent from year ago levels. A numbers of countries, more prominently China and Russia, have significantly limited their purchases of US pork products. Even more important is what is happening in Mexico. Demand for pork in that country has collapsed and this has likely impacted Mexican purchases of US pork products. But, there are signs that cash pork prices may be stabilizing. Heavy ham prices declined from 52 cents per pound to 40 cents, or 23 per cent, between April 15 and April 30.

On Tuesday, heavy ham prices were quoted at 47 cents, a notable improvement from a few days ago but still much lower than the export fueled prices of a year ago. Also important for hog values at this time of year is the price of pork loins, a regular staple in retail meat cases as consumers fire up their grills this time of year. On that front, the industry has yet to see any positive news. The price of 1/4” trim pork loins on Tuesday was quoted at 85.69 cents per pound, about the same as the day before and 8.9 cents or 9 per cent lower than a week ago.

Current prices for pork loins are some 45 per cent lower than a year ago. It is hard to say what will happen with pork prices at retail in the short term but, judging from the action in futures, the market thinks that the current situation will be short lived. Indeed, current pork prices offer excellent value to retailers looking for post Memorial Day promotions. One would also think that as retailers emptied the pipeline following the influenza outbreak, there is also plenty of pent up pork demand, which should be supportive of pork and hog prices going forward.