Ron Plain and Scott Brown
University of Missouri
Pork demand at the retail level was 4.0% higher this July than last, the fifth consecutive that was higher than a year ago. Export demand for pork was up 6.5% compared to July 2012. This was the third consecutive up month.
USDA's August update to their production and price forecasts (WASDE) raised slightly their prediction for 2013 pork production, left 2014 pork production unchanged, left their hog price forecast for both years unchanged, and raised their forecasts for both pork imports and exports in 2013 and 2014. In net, they lowered their forecast of per capita pork use for both 2013 and 2014 by 0.1 pound
USDA raised their forecast of the 2013 national average corn yield by 0.9 bushels to 155.3 bushels per acre. They lowered their soybean yield estimate by 1.4 bushels to 41.2 bushels per acre.
The September corn futures contract ended the week at $4.50/bushel, down 42 cents for the week. September soybean futures gained 52 cents this week to settle at $14.8875.
Testing data from the National Animal Health Laboratory Network says that as of September 1, the Porcine Epidemic Diarrhea virus has been confirmed on 584 farms in 17 states. This is an increase of 31 farms from the week before. The Pork Board, NPPC, and swine veterinarians have issued producer guide sheets on manure handling procedures to minimize the risk of spreading PED.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $90.46/cwt, up $3.86 from last Friday. The eastern corn belt had a morning price average of $90.53/cwt. Neither the western corn belt nor Iowa-Minnesota had enough early morning sales for a price quote. Peoria had a live price top this morning of $61/cwt. Zumbrota, MN topped out at $63/cwt. The top price for interior Missouri live hogs Friday was $62.250/cwt, up 75 cents from the previous Friday.
Friday morning's pork cutout value based on mandatory price reporting was $97.97/cwt FOB plants, up $3.03 from the week before and up $20.49 from a year ago. The average hog carcass price is 92.3% of the calculated pork cutout value.
Pork packer gross margins were above $30/head last week. That's part of the reason for strong hog prices this week.
Hog slaughter this week totaled 2.172 million head, up 10.3% from the week before (due to last Monday's holiday), but down 10.5% compared to the same week last year. This was the eighth consecutive week with hog slaughter lower than expected based on the June pig report. The average barrow and gilt live weight in Iowa-Minnesota last week was 270.7 pounds, up 0.5 pounds from a week earlier and up 1.1 pounds from a year ago.
The October lean hog futures contract settled at $90.70/cwt today, down 20 cents from the previous Friday. December hog futures ended the week at $87.25/cwt, up 25 cents from the week before. February hogs closed the week at $88.80/cwt.