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United States Department of AgricultureAgricultural Marketing ServiceJanuary 2022Through comprehensive market surveys, case studies, and research partnerships, AMS provides insight into direct-marketing trends and emerging food system models.A User’s Guide to USDA’s Pork Carcass CutoutWHAT IS IT?The cutout value of anindividual pork carcass isbased on the amounts ofthe various cuts producedby that carcass and theprices of those cuts. Its valueis expressed in cents perpound or dollars per hundredpounds (centi-weight or cwt).Theoretically, each hog has aunique cutout value.Every pork slaughter plantcomputes a plant cutoutvalue that representsthe average value of thecarcasses produced by thatplant in a specifed timeperiod. The plant cutout valueis determined by the amountof pork cuts produced andprices received for thosecuts. A plant’s cutout valueis confdential, proprietaryinformation and is the singlemost important determinantof the price the plant will payfor hogs.USDA’s Estimated PorkCarcass Cutout (PCC) isthe estimated value of astandardized pork carcass(currently 55-56% lean, 215lbs.) based upon industryaverage cut yields andaverage market prices of subprimal pork cuts. Industryaverage cut yields areupdated by USDA annually inJanuary based on the resultsof a survey of packers theprevious July. Market pricescome from USDA wholesalepork, lard, and meat and bonemeal price reports.The PCC refects theoverall supply and demandsituation for wholesalepork cuts. Compositevalues are calculated eachday for the various porkprimals and these valuesare combined to refect asingle composite value of apork carcass. These cutsrefect a standard cuttingspecifcation and must betraded on a negotiated basisto deliver within ten days ofthe time of sale for combos(large totes or containersthat hold approximately 2000lbs of product) and 14 daysfor boxed product. Figure 1shows a typical cutout valueprice report as it appears inUSDA’s National Daily PorkReport (LM PK602).Figure 1: Typical USDA cutout value reportUSDA ESTIMATED COMPOSITE PORK CARCASS CUTOUTBased on FOB Plant Pork Prices and Industry YieldsCalculations for a 215 lb. Pork Carcass55-56% lean, 0.55” - .70” backfat at last ribDateTotalLoads Cutout Loin01/18307.2Change76.101.79ButtPicRibHam Belly68.87 78.36 60.43 104.74 79.86 99.322.432.303.66-0.402.121.2101/17260.174.3166.44 76.06 56.76 105.14 77.74 98.1101/16350.473.3264.31 77.04 54.09 106.35 76.85 97.4701/15456.973.8866.95 78.10 58.89 107.34 73.18 97.9601/14191.774.8165.71 79.13 58.23 104.93 77.47 99.69Current Five Day Simple Average74.4866.46 77.74 57.68 105.70 77.02 98.51NOTE: Value may change without adequate test.The Pork Carcass Cutout (PCC) is an estimate of the valueof a 55-56% lean, 215 lb. hog carcass based upon currentwhole-sale prices being paid for sub-primal pork cuts.BACKGROUND INFORMATIONIn the fabrication process,pork carcasses are brokeninto primal units which, inturn, are broken into varioussub-primal cuts. Primals can becut in different styles to makedifferent sets of sub-primalsto ft different customer andconsumer needs. Sub-primalfabrication also produces byproducts of varying type andquantity. These by-products(such items as trimmings,bone, fat and skin) have valuethat must be added into theprimal value to fully account forall parts of the carcass.USDA is an equal opportunity provider, employer, and lender.1The potential value of subprimals generally dependson how much work must bedone on the primal cut toextract the specifc subprimal. Boneless cuts requiremore fabrication and thuscost more to produce thando bone-in cuts. They arealso worth more to end usersbecause they require lessend-user labor and containless waste product. Thesame is true of fat trimming.Styles produced and sold inlarger volume will have moreimpact on the overall cutout.Seasonal shifts in therelative amount and typesof cut styles are refectedin the PCC by weighting thevarious styles according tothe volume of each cut stylereported to USDA.2019 United States Department of Agriculture. Agricultural Marketing Service.

101MARKETINFORMATIONHOW DOES IT WORK?The PCC is a series of mathematical calculations which usescurrent sub-primal pork cut prices and industry-average cut yieldsto calculate primal values. Industry-average primal cut yields arethen used to translate primal values to a carcass value. Thesesteps and their accompanying calculations are best illustratedthrough a sample calculation. The same series of steps is followedfor all of the other pork primals.STEP 1: SUB-PRIMAL CUTSTO PRIMAL VALUEA value for each component isdetermined by deductingpackaging costs from eachcomponent’s market price.Each component’s contributionto the primal value is computed by multiplying its individualvalue by its yield factor. Thoseare summed to determine theprimal’s gross value and alabor factor is deducted tocompute its net value.For example, the steps of determining the value of a ¼” trimmedpork loin cut in the bone-in center cut, tender-in vacuum-packedloin cutting style are outlined below. This cutting style breaks theprimal cut (a ¼” trimmed pork loin) into four primary sub-primals(bone-in center-cut tender-in loin, boneless sirloin, blade ends andbutt tender) and three by-products (72% trim, 42% trim and bone).The yields of these components appear in Figure 2 and in Appendix A, Table A-1 under style #7. Note that 0.49% of the loin isunaccounted for in these yields and assigned to “shrink” at a valueof zero. Shrink is caused by moisture loss and cutting loss.USDA bases its labor costs onthe total percent of the primalcut that is not accounted for inthe primary sub-primal. In ourexample, the primary subprimal (bone-in center cuttender-in loin) yield from theprimal loin is 61.61%. Laborwas required to remove theremaining 38.39% of theprimal. To calculate laborcosts, USDA multiplies38.39% by an industrystandard 33.00 processingcost. This results in 12.67in labor cost which issubtracted to arrive at a laborfree value of the originalprimal.Figure 2: Calculation of the value of a ¼” Trim Primal Loinusing the Bone-in Center Cut, Tender-In cutting style.Step 1:ComponentValues toPrimal ValueBone-in Center Cut, Tender-Ln Loin61.61% * 130.42 80.35 Boneless Sirloin8.18% * 93.32 7.63 Blade Ends12.33% * 57.23 7.06 Butt Tender1.21% * 198.52 2.40 72% Trimmings6.71% * 59.78 4.01 42% Trimmings4.68% * 22.25 1.04 Bone4.79% * 5.26 0.25 Shrink0.49% * 0.00 0.00-Labor1 - 61.61% 38.39% * 33.00 -12.67 90.07Value of a 1/4” primal loin cut into a bone-incenter cut, tender in loin 90.07USDA is an equal opportunity provider, employer, and lender.2

MARKET101INFORMATIONSTEP 2: PRIMAL VALUES TOCOMPOSITE PRIMAL VALUEThe calculations outlined inStep 1 determine a primalvalue for each cutting stylebased on the sub-primalsproduced by that style. As canbe seen in Figure 1 and TableA-1 in the Appendix, there arenine specified cutting styles forloins. To determine an overallprimal value, thevalues of the various cuttingstyle values are combinedbased on the volumes of thevarious cutting styles reportedto USDA. These calculationsare shown in Figure 3. Theresult is an average composite value for a ¼” trimmedprimal loin. In this case, thevalue is 70.22 per cwt. or70.22 cents per pound.Figure 3: Creating a composite primalvalue from sub-primal style valuesStep 2:Sub-PrimalStyles toPrimalLoin 11/4" Trim Loin VAC9.40 lds @ 70.69Loin 2 - 1/4" Trimmed Loin Paper1.00 lds @ 86.50Loin 3 - 1/4" Trimmed Loin Combo5.87 lds @ 64.45Loin 4 - 1/8" Trimmed LoinVAC 12.72 lds @ 70.83Loin 5 - 1/8" Trimmed Loin Paper0.29 lds @ 86.25Loin 6 - 1/8" Trimmed Loin Combo2.15 lds @ 60.14Loin 7 - Bone-in CC, Tender-in Loin VAC3.96 lds @ 87.06Loin 8 - Bnls CC Strap-on Loin28.00 lds @ 68.36STEP 3: COMPOSITE PRIMALTO UNTRIMMED (DROP)PRIMAL The next step is to convertthe “trimmed” primal value to anuntrimmed or commodity primalvalue. The appropriate “TrimmedPrimal to Untrimmed” table isused to determine this value(see Figure 4). Figure 4: Trimmed composite primalto untrimmed (drop) primal ComponentLoin 9 - Bnls CC, Strap-ofLoin 33.14 lds @ 70.43Step 3: 1/4”TrimmedPrimal toUntrimmedPrimal 70.22Composite 1/4” Trimmed Primal Loin Value 70.22USDA is an equal opportunity provider, employer, and lender.Note that there is no “trimmedto-untrimmed” adjustment forhams since the beginning hamsubprimals (Selected Hams20-23# and 23-27#) areuntrimmed (i.e. have a yield of100% in Table A-5). For picnics, all three styles in TableA-3 start with an untrimmedpicnic so no “trimmed-tountrimmed” adjustment isnecessary.3%ValueTotal1/4" Loin85.08% 70.22 59.74T/Trace0.36% 34.05 0.12Fat10.96% 19.60 2.15Skin3.60% 28.55 1.03Drop Loin100% 63.04

MARKET101INFORMATIONSTEP 4: DROP PRIMALS TOCARCASS CUTOUTIn step 4, we combine thecomposite primal loin valuecalculated in Step 3 with similarvalues calculated for the othersix primals and four individualcarcass parts to determine acomposite cutout (see Figure 5).Each primal is weighted by thepercentage of the entire carcassthat it represents (its yield). Noteoccurs during the fabricationprocess. This loss is generallyparts of the carcass that are toosmall to be used (such as sawand blade residues) or becomecontaminated (dropped on thefloor) and are deemed inedible.The percentage of cut loss issimply that amount notaccounted for by other cuts andpieces. The value of cut loss isthe value of rendered productFigure 5: Composite primal values to cutout valueComposite Primal Loin Value25.42% * 62.97 16.01Step 4:ComponentValues toPrimal Value Composite Primal Butt Value10.24% * 82.37 8.43 Composite Primal Picnic Value11.30% * 39.89 4.51 Composite Primal Sparerib Value4.79% * 120.50 5.77 Composite Primal Ham Value24.49% * 46.16 11.30 Composite Primal Belly Value16.27% * 128.97 20.98 Composite Primal Jowl Value1.28% * 32.94 0.42 Hind Feet1.29% * 21.10 0.27 Neck Bones1.75% * 50.19 0.88 Tails0.17% * 68.78 0.12 Front Feet1.00% * 60.28 0.60 Cut Loss2.00% * 4.30 0.09 69.38Composite Cutout Value 69.38USDA is an equal opportunity provider, employer, and lender.4