Ron Plain and Scott Brown
University of Missouri
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This week Triumph Foods and Seaboard Foods announced plans for a joint venture to build a hog slaughter plant in Sioux City, Iowa. The plant is expected to cost $264 million, slaughter 3 million hogs per year and begin operating in the summer of 2017.
Triumph currently operates the nation's newest large hog slaughter plant which opened in January 2006 in St Joseph, MO. Seaboard operates the second newest big plant which opened in 1995 in Guyman, OK.
In December, Clemens Foods announced plans to build a $255 million hog slaughter plant in Coldwater, MI.
The May WASDE contained its first forecast of 2016 production and prices. USDA expects 2016 pork production to be up 1.2% from this year and they expect this year to be up 6.8% from last year. Barrow and gilt prices averaged $76.03/cwt live in 2014. They are looking for prices to be $26-28 lower this year and another $2-4 lower in 2016 than this year.
This was the seventh consecutive week with higher hog prices. Thursday's average negotiated carcass price for plant delivered hogs was $79.39/cwt which is $1.88 higher than a week earlier.
The national average negotiated barrow and gilt purchase price on the morning report today was $80.05/cwt, up $3.66 from a week ago. The western corn belt averaged $81.49/cwt and Iowa Minnesota had a morning average of $81.83/cwt. There was no eastern corn belt negotiated price quote this morning.
Peoria had a top live price today of $54/cwt, $2 higher than last Friday. The top price today for interior Missouri live hogs was $55/cwt, up 75 cents the previous Friday.
This morning's pork cutout value was $83.56/cwt FOB the plants. That is up $4.51 from the week before, but down $29.22 from a year ago. For the sixth week in a row, wholesale belly prices are lower than the pork cutout value.
Hog slaughter this week totaled 2.128 million head, up 0.8% from the week before and up 6.5% from same week last year. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 281.2 pounds, down 0.8 pound from the week before and down 5.4 pounds from a year ago. This was the seventh consecutive week with weights lighter than last year.
The June lean hog futures contract closed today at $83.35/cwt, down $1.47 for the week. July hog futures ended the week at $83.92/cwt, unchanged for the week. August hogs lost 20 cents to close at $84.02/cwt. The October contract settled at $73.65/cwt.
USDA estimates that 75% of corn acres had been planted by May 10. That is 20 points ahead of last week, 20 points ahead of last year, and 18 points ahead of the five year average. The May WASDE predicted this fall's corn harvest to be 13.63 billion bushels, down 4.1% from last year's record and the third largest ever.
The July corn futures contract settled at $3.655/bushel today, up 2.5 cents from a week ago.
Source: AGEBB