The average U.S. pork price hit a record high for a second straight day Monday, according to a Reuters report. The strength came amid strong pork exports and tight supplies, according to government data and traders.
The average pork price reached a record of $97.79 per hundredweight on Monday, beating Friday's record high of $95.49, said the USDA.
There had been concerns that rising prices could curb domestic demand but he data helped bolster confidence among traders that domestic demand for pork was improving.
"Production is down and exports are up and I'm starting to feel better about domestic demand," said Ron Plain, livestock economist at the University of Missouri. "And when I also look at the beef numbers, it looks to me like maybe we're looking at a bit stronger demand ahead of us.
The rally this time was fueled by very tight bacon supplies, which lifted cash pork belly prices to a record high of $150 per hundredweight recently, traders said.
Meanwhile, packer margins also remain strong. “The run-up in cutout values and near-record byproduct values have led to excellent packer margins, say Steve Meyer and Len Steiner in the CME Daily Livestock Report. “In fact, if last week’s actual by-product value is the same as the week before, last week’s estimated gross packer margin will be just over $44 per head, the second highest ever.
The recent run-up in cash pork prices exceeded the previous record highs posted in August 2008 when China was buying pork to meet demand for the Olympic Games it hosted.
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Source: Reuters, Daily Livestock Report