Monday Morning Livestock Market Update - Pork Weakness Expected to Continue

GENERAL COMMENTS:

On Friday, USDA released its Livestock, Dairy, and Poultry Outlook for October. For cattle, the main changes from September's report all lie in the 2026 data. With the tariff-free quota for lean beef as well as the higher August import data released, USDA believes the market will see a higher import total from September's forecast. On top of that, with the two ports from Mexico open and bringing cattle across the border, there is a higher number of live cattle imports expected as well. With a slow slaughter pace, the forecast for beef production is slightly lower than the September report for both 2026 and 2027.

For the pork or hog outlook, USDA reduced its total pork reduction forecast by 150 million pounds for 2026 and 245 million pounds in 2027. This comes from data released previously in the September Quarterly Hogs and Pigs report. Most of these reductions are based on lower expected farrowings. Overall, while pork production was reduced from September's report, it is still expected to be 27.6 billion pounds, up 0.2% over last year and 27.8 billion pounds for 2027. Exports are forecasted to grow 1.1% from last year and 0.6% year over year for 2027.

	BULL SIDE		BEAR SIDE
1)	Feedlot placements remain historically low, reflecting the lack of cattle supplies.	1)	Mexican imports are expected to increase, with more cattle moving across the border quickly.
2)	Cash prices for cattle and feeders remain strong despite futures action.	2)	Some believe the lower placement numbers reflect higher heifer retention, signaling possible herd growth coming.
3)	Farrow to finish hog operations continue to be profitable.	3)	Sluggish growth in demand for pork imported by Mexico will be a strong headwind for lean hogs into next year.
4)	While Mexico's pork imports aren't improving nearly as quickly as years past, it is still growing at a rate of 0.15% in 2026. Mexico accounts for 38% of shipments year-to-date by volume.	4)	Overall, demand for pork is down both domestically and with our foreign customers.