Ron Plain’s hog report
The results of USDA's March hogs and pigs survey were released this afternoon. It said the breeding herd was up 0.5% at the first of March and market hog numbers were up 0.6%. Spring farrowings are predicted to be down 2.6% and summer farrowings also are forecast to be 2.6% lower than last year. More comments next week.
Stocks of pork in cold storage were up 12% to 578 million pounds at the end of February. That is not necessarily bad. It used to be that increasing stocks was an indicator of slow pork sales and thus a price negative. But increasingly, rising stocks of frozen pork are an indicator of next month's pork exports and thus a price positive. Exporters need to accumulate stocks of frozen pork before shipping. For the last 13 months of export data, pork stocks and next-month exports have a correlation of 0.62.
Some western colt belt packing plants were short on hogs at week's end causing Friday's hog prices to surge with a few hogs at $90/cwt of carcass. Friday's prices in the western corn belt were the highest in over a decade. The national weighted average carcass price for negotiated hogs Friday morning was $84.12/cwt, up $4.82 from the previous Friday. Friday morning's western corn belt carcass prices averaged $88.81/cwt. Iowa-Minnesota also averaged $88.81/cwt. The eastern corn belt averaged $81.90/cwt Friday morning. The top live hog price Friday at Peoria was $56.50/cwt. Zumbrota topped out at $57/cwt. The interior Missouri live top Friday was $58.75/cwt, up 75 cents from the previous Friday.
USDA's Thursday afternoon calculated pork cutout value was $93.22/cwt, up $1.16 from the previous Thursday. Loins, bellies and hams were higher this week. Butts were lower.
The average carcass weight of barrows and gilts slaughtered the week ending March 12 was 206 pounds, the same as the previous week and 5 pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 275 pounds, up 0.7 pound from the week before and up 4.9 pounds compared to a year earlier. Hog weights have been above year-ago for the last 26 weeks. Year-to-date hog slaughter is down 1.9%, but because of weights pork production is up 0.7%.
Hog slaughter totaled 2.116 million head this week, down 1.1% from the week before and down 3.3% compared to the same week last year.
The April lean hog futures contract ended the week at $92.47/cwt, up $4.15 from the previous Friday. The May contract settled Friday at $101.72/cwt. June hogs settled at $103.70 and July closed out the week at $102.67. August hogs settled at $102.00 and October at $91.45.
May corn futures ended the week at $6.895 per bushel, up 6 cents from the week before. The July corn contract settled at $6.955/bu. up 5 cents from a week earlier. September settled at $6.4475.