Key Highlights

  • Nearby lean hog futures traded near 75.48 cents during today's session, down 0.16%.
  • December hogs closed at 68.37 cents on October 12, up 0.55 cents.
  • The USDA carcass cutout was US$81.71 per hundredweight, lowest since December 2023.
  • Smithfield guided hog production adjusted operating profit to US$25 million to US$45 million.

Nearby Hogs Slip as December Trades Far Lower

Nearby lean hog futures, the expiring October contract, traded near 75.48 US cents per pound during today's session, down 0.12 cents, or 0.16%, according to market data. They are down 3.12% on the week and 5.15% on the month, and 11.28% lower year to date. The December contract closed at 68.37 cents on Monday, October 12, up 0.55 cents, after closing at 67.82 on Friday.

Why the Contract Month Matters

The expiring October contract trades well above December. CME commentary reported October at 76.925 cents on Wednesday, October 7, a life-of-contract low, while December settled at 69.100, a gap of about 8 cents between adjacent months. Lean hog futures are cash-settled against the CME Lean Hog Index, and the October contract expires in mid-October, so data sites may soon switch their front-month quote to December.

What Pressured Prices

Wholesale pork was the main weight. The USDA carcass cutout was US$81.71 per hundredweight on October 7, its lowest since December 2023, and domestic demand has been soft as consumers chose chicken over pork. On Thursday, October 8, weak cash hog and pork prices pressured the market, with the October, February and April 2027 contracts hitting life-of-contract lows during the session.

Producers Feel It First

Smithfield Foods (NASDAQ:SFD) cut its third-quarter hog production outlook on September 8, saying the change was primarily driven by lower hog prices. It guided hog production adjusted operating profit to US$25 million to US$45 million, while fresh pork showed an expected loss of US$70 million to US$90 million because of narrow spreads. Total company adjusted operating income for the quarter was guided at US$115 million to US$175 million, and its packaged meats outlook was reaffirmed.

A producer with its own herd is hurt by lower hog prices, while a pure processor can gain if its hog cost falls faster than pork prices. In Smithfield's case, both parts struggled.

Companies in the Chain

Tyson Foods (NYSE:TSN) is a processor, not a hog farmer. In its fiscal third quarter its pork segment earned US$60 million at a 3.8% margin, and it expects US$250 million to US$300 million for the year, so pork is currently its steadier red-meat business compared with beef. Canada Packers (TSX:CPKR), spun out of Maple Leaf Foods, integrates hog production, processing and value-added products. It reported a second-quarter net loss of $28.4 million on sales of $431.7 million, saying pork cutout values failed to strengthen in line with typical seasonal trends, and a $48.3 million non-cash fall in biological asset values contributed to the loss.

Maple Leaf Foods (TSX:MFI) no longer owns pork operations and now buys pork from Canada Packers, so lower hog prices matter to it only as an input cost. Hormel Foods (NYSE:HRL) makes branded meat products and credited favorable pork input costs for higher foodservice profit. In the UK, Cranswick (LSE:CWK) said pork sales rose 3% and listed pig prices among cost pressures, while export sales fell 1%, which management tied to lower prices in China and global pig meat supply.

Calendar: Canada Packers on October 28 and the December 23 Hogs and Pigs Report

Canada Packers reports on October 28, 2026 before the market opens, with a call at 8:00am ET, and the USDA's next Hogs and Pigs report is not due until December 23. Tyson is reported to publish fiscal fourth-quarter results on November 16. Firmer pork cutout values or stronger export sales would support prices, while continued weak domestic demand and strong chicken availability could keep pressure on them.

In short, hog prices and pork values are weak, which hurts producers most, while processors and food makers see a more mixed picture because cheaper inputs can also mean lower selling prices.