Ron Plain: Cash hog prices this week were lower

Ron Plain and Scott Brown
University of Missouri
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On the last day of April, stocks of frozen pork were up 1.5% from the month before, but down 16.7% from a year ago. Frozen supplies of most pork cuts were down compared to April 2013, except for pork bellies which were up 47% from last April. Bacon prices are usually the highest in late summer and early fall. It appears that someone is trying to make sure that reduced hog slaughter due to PEDV won't mean people will have to get by without bacon during the upcoming BLT season.  Compared to April 2013, stocks of red meat and poultry in cold storage were down 17% with beef down 21.1%, frozen chicken down 15.3%, and the amount of turkey in cold storage down 18%.

Iowa State University calculations estimate the typical market hog sold during April cost $56.11/cwt of live weight to raise and was sold at a profit of $81.64 per head. The profit was the second highest of record after a profit of $92.35/head the month before. The cost of production has declined each month since January 2013.

This week's USDA Crop Progress report says that 73% of corn acres were planted by May 18. That is 14 points ahead of the week before and 8 points ahead of last year, but 3 percentage points behind the 5 year average.

Cash hog prices this week were lower for the seventh consecutive week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $105.90/cwt, down 51 cents from last Friday, but up $15.71 from a year ago. There was no eastern corn belt reported price this morning. Both Iowa-Minnesota and the western corn belt averaged $107.90/cwt this morning. Peoria had a top live price today of $74/cwt as did Zumbrota, MN. The top price Friday for interior Missouri live hogs was $75/cwt which was the same as the previous Friday.

Friday morning's pork cutout value was $114.66/cwt FOB the plants. That was up $1.88 from the week before and up $18.78 from a year ago. This morning's hog carcass price averaged 92.4% of the cutout value.

Hog slaughter this week totaled 1.973 million head, down 1.3% from the week before and down 4.8% compared to last year. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 287.5 pounds. That was 0.9 pounds heavier than the week before and 10.9 pounds heavier than a year ago. Last week tied the record set three weeks earlier for the heaviest week on record.

The June lean hog futures contract today closed at $116.85/cwt, down $2.07 for the week. July hog futures ended the week at $123.72/cwt, down $1.53 from the week before. August hogs gained $1.35 this week to close at $126.95/cwt. The October contract ended the week at $105.60/cwt; December at $95.12/cwt.

Corn futures were lower this week. The July contract lost 5 cents this week to close at $4.78. The September contract ended the week at $4.755, down 6 cents from the previous Friday.

Source: AGEBB