Hog Outlook: The retail pork price declined 3 cents per pound in February to $3.73.

Ron Plain and Scott Brown
University of Missouri
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The retail pork price declined 3 cents per pound in February to $3.73. This is still 24 cents above the February 2013 price. The choice beef retail price was 40 cents per pound above the year ago level, while the retail chicken price was unchanged.

Record high hog slaughter weights continue to allow year to date pork production levels to be above 2013, despite fewer hogs going to slaughter thus far in 2014. February federally inspected dressed hog weights reached 213 pounds for the third consecutive month, running 6 pounds and 2.9% above a year ago.

Now that wholesale chicken prices have moved sharply higher in the last couple of weeks, it will be interesting to see if producers try to grow chicken supplies to account for reduced U.S. red meat production. Despite modest gains in pork, the sum of commercial beef and pork production in February was at its lowest level since February 2007. The absence of strong chicken production growth has been one factor allowing the sharp increase in hog and pork prices in recent weeks.

The pork cutout value on Friday morning was $131.04/cwt FOB the plants, gaining $8.39 from a week ago. All primal cuts were higher, with ribs advancing four percent, butts up six percent, and loins, hams, picnics and bellies strengthening by 7-8%.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $122.60/cwt, up $12.13 (11%) from last Friday. Hogs in the eastern corn belt were at $119.35/cwt, with the western corn belt and Iowa-Minnesota hogs at $127.73/cwt. Peoria had a top live price this morning of $82/cwt, $8 higher than last week. The top for interior Missouri live hogs Friday was $86/cwt, with Zumbrota coming in at $87/cwt. The average hog carcass price was 93.6% of the cutout value.

Hog slaughter this week totaled 2.042 million head, up 0.9% from last week but down 6.3% compared to the same week last year. Year to date hog slaughter is trailing the 2013 level by 3.7%.

The average barrow and gilt live weight in Iowa-Minnesota last week was 283.0 pounds, up 0.9 pounds from a week earlier and up 6.0 pounds from a year ago.

Hog futures gained ground again this week. The April lean hog contract jumped $6.08 during the week to close at $125.37/cwt today. May hog futures ended the week at $125.95/cwt, up $2.15 from the week before. The June contract gained $2.32 for the week to close at $130.17. July closed at $126.35 for the week with August settling at 126.65/cwt.

Source: AGEBB