by Ron Plain and Scott Brown
The USDA Prospective Plantings report issued today indicates that farmers intend to plant 95.9 million acres of corn this year, the highest level in 75 years. Though there are a lot of steps between intending for a large corn crop and actually getting one into the bin, if this many acres do get planted and are matched with reasonable yields, grain costs should decline this fall.
The hog-corn ratio fell to 10.1 for March. With the exception of the disastrous months between January 2008 and January 2009, when the average ratio was below 10, this is the lowest reading since 1998.
Gasoline prices continue to march upward throughout the nation, keeping those in the meat industry nervous about a potentially negative impact on consumer meat demand due to higher fuel costs in the budget and rising retail meat prices.
Hog prices ended this week mostly $1-3 lower than the previous week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $79.16/cwt, down $0.76 from last Friday. The western corn belt averaged $80.41/cwt this morning. Iowa-Minnesota averaged $79.44/cwt. The eastern corn belt had a morning average of $77.12/cwt. Friday's top live hog price at Peoria was $57/cwt. Zumbrota had a top at $54/cwt. The top for interior Missouri live hogs was $57.75/cwt, down $3 from the previous Friday.
USDA's Thursday afternoon calculated pork cutout value was $79.51/cwt, down $0.31 from the previous Thursday. Hams, butts and loins were lower; bellies were steady. The western corn belt average hog carcass price is 1.1% above the pork cutout value. Cutout values continue to struggle despite slower slaughter rates. Hog slaughter totaled 2.113 million head this week, down 0.9% from the week before, and down 0.2% compared to the same week last year. Barrow and gilt carcass weights for the week ending March 17 averaged 206 pounds, unchanged from the week before. Year-to-date pork production is up 0.7%.
Today's close for the April lean hog futures contract, $83.43/cwt, was down $1.59 from the previous Friday. The May lean hog futures contract settled at $91.93/cwt, down $1.82 for the week.