Despite the pull back from peak levels reached earlier this summer, both pork and beef cutout prices remain well above 2007 price levels. Surging pork and beef exports appear to be important contributing factors says Erin Daley, U.S. Meat Export Federation manager of research and analysis.

“When you look at the cutout cut by cut, it reveals a strong trend,” Daley said. “Pork and beef cuts typically bound for overseas markets are showing excellent strength compared to cuts that primarily sell in our domestic market.” 

Pork producers had expected erosion in cutout value due to high production levels – about 9 percent above 2007. Although down from a mid-August record high of nearly $95, over the past week, the pork cutout has averaged about $80 –well above the year-ago $69 level.

U.S. pork exports continue their all-time record pace in 2008. Through the first half of the year, pork exports have increased 67 percent in volume over last year. Daley says an examination of specific cut prices shows the pork cutout is experiencing a significant price boost from this strong performance in the export markets.

“Loins, butts, picnics and hams are all up significantly over last year’s prices,” Daley said. “But prices for the mainly domestic items – including ribs and bellies –are actually lower than last year.”

“Tremendous performance in markets like China, Russia and Japan has allowed us to export almost 25 percent of U.S. pork production,” added Daley. “This has been the key to keeping hog prices at close to record highs, despite the high production level so far this year.”

Current Pork Cutout values:

  • Rib  $90.97
  • Belly  $77.43
  • Loin  $97.36
  • Butt  $85.45
  • Picnic  $63.12
  • Ham  $72.77

    (Based on  200 lb pork carcass)     
     

The U.S. beef industry is enjoying similar results. Beef and beef variety meat exports in the first half of 2008 reached their highest level since 2003, increasing by 30 percent in volume over the same period in 2007. This performance has helped the Choice beef cutout price – which has averaged $161 over the past week – to remain about 10 percent above last year’s level. Overseas demand for manufacturing beef also has provided a boost for cattle prices, helping offset negative price pressure that had been anticipated from a high level of U.S. cow slaughter.

Current Beef Cutout values:

  • Loin  $211.96
  • Rib  $218.37
  • Chuck  $138.01
  • Round  $141.84
  • Brisket  $108.45
  • Short Plate  $120.25
  • Flank  $98.78

Source: USDA, USMEF