Hog Outlook: The April WASDE lowered USDA's forecast of 2014 pork production

Ron Plain and Scott Brown
University of Missouri
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U.S. pork exports were up 5.5% in February compared to a year ago thanks to increased shipments to Mexico, China and Colombia. Imports of pork into the U.S. were down 6.7% in February due to less pork coming in from Canada. During February, pork exports equaled 22.75% of production and imports equaled 3.45% of production. The increase in exports is encouraging news given U.S. pork prices are at record levels.

Feeder pig imports were down 9.7% in February. Imports of other hogs were down 12.2%.

The April WASDE lowered USDA's forecast of 2014 pork production. They now predict 2014 pork production will be down 1.9% from last year to the lowest level since 2011. USDA's forecast for live hog prices in 2014 is for an average somewhere between $72/cwt and $75/cwt which is well above the 2011 record of $66.12/cwt.

Domestic meat demand in February was up 2.7% with pork demand up 5.9% compared to a year ago. Export demand for U.S. pork was up 13.4% in February.

The average live weight of barrows and gilts in Iowa-Minnesota last week, 285.5 pounds, was record high for the third consecutive week. Last week's average was up 0.5 pound from a week earlier and up 8.3 pounds from a year ago.

Cash hog prices this week were sharply lower. The national average negotiated carcass price for direct delivered hogs on the morning report today was $119.30/cwt, down $6.04 from last Friday, but up $43.34 from a year ago. The eastern corn belt reported a morning average of $119.01/cwt. The western corn belt had a morning price quote of $119.67. There was no Iowa-Minnesota hog price quote this morning. Peoria had a top live price today of $85/cwt. Zumbrota, MN had no price report today. The top price Friday for interior Missouri live hogs was $87.50/cwt, down $3 from the previous Friday.

Friday morning's pork cutout value was $125.12/cwt FOB the plants, down $7.34 from the week before and up $44.75 from a year ago. This morning's hog carcass price averaged 95.3% of the cutout value.

There were 257 new farms with positive tests for the PED virus during the week ending on March 30. That was the second lowest week since mid January. Hopefully, new outbreaks will continue to decline as the weather warms. There are now more than 5,500 U.S. hog farms with the PED virus.

Hog slaughter this week totaled 2.02 million head, down 0.5% from the week before and down 2.8% compared to the same week last year.

The April lean hog futures contract settled at $124.92/cwt today, up $1.77 from the previous Friday. May hog futures ended the week at $120.60/cwt, up 10 cents from the week before. June hogs gained 67 cents to close at $121.22/cwt. The July contract ended the week at $117.55/cwt, unchanged for the week. August closed at $116.60/cwt, off 55 cents from the previous Friday.

Source: AGEBB