37 The Trusted Source for Canada’s Pork Producers Better Pork | October 2024 The United States Department of Agriculture (USDA) updated their outlook for the U.S. 2024 and 2025 pork supply and demand estimates in the August World Agricultural Supply and Demand Estimates (WASDE) report. They also updated their feed grain balance sheet projections and there were some big changes there that impacted the grain futures outlook for the rest of the year and into 2025. According to the USDA’s August 2024 WASDE livestock update, the 2024 U.S. pork production estimate at 28.048 billion pounds is higher year-on-year (Y/Y) by +2.73 per cent while the 2025 pork production at 28.55 billion pounds is +1.79 per cent higher Y/Y. 2024 U.S. pork exports projection at 7.122 billion pounds is higher Y/Y by +4.4 per cent while 2025 pork exports at 7.365 billion pounds are +3.4 per cent higher Y/Y. 2024 average U.S. hog price projection at $59.38 per hundredweight (/cwt) is only +$0.79 higher Y/Y and the average for 2025 is projected at $58/cwt. As far as U.S. feed grain supplies are concerned, the USDA reported new record yields for the U.S. 2024-25 corn and soybean crops in the August crop report. The U.S. 2024-25 corn crop yield was projected at a big 183.1 bushels per acre (bpa), which was 2.1 bpa higher than the prior estimate. The 2024-25 soybean crop yield was also projected at a record 53.2 bpa, which was up by one bpa versus the prior estimate. The big crop supply outlook for this year is, expectedly, a formidable headwind for grain and oilseed futures. This supply glut could find it challenging to attract ample demand, and futures are likely to ease off further. The drop in feed costs during spring and summer seems to be aiding producer profits more than higher Y/Y hog prices. For example, in June, Iowa State University hog profit calculations dropped to $14.85 per head, which was the smallest profit since April, but it was the third straight month with profits. This was aided by a significant $11.09 / cwt drop in the cost of production. Given the monster feed crops expected this year, feed costs are likely to dip further. For the 2024-25 marketing year, the USDA expects the average corn price at $4.30 per bushel, which compares to about $6+ that we saw during the early part of last year. The lean hogs cash index had eased since early August and futures traded at a steep discount to cash as of the third week of August. Pork cut-outs were falling below $100. Packers, though, continued to run a strong slaughter chain speed during summer due to strong margins and ample hog availability, which kept near-term cash hog values supported. Retail price reaction to seasonally higher summer hog prices is delayed, and they peak normally during the colder HELP FOR PRODUCERS’ BOTTOM LINE Lower feed costs could support improvements By Moe Agostino & Abhinesh Gopal Moe’s Market Minute The drop in feed costs during spring and summer seems to be aiding producer profits. Jodie Aldred photo
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