Ron Plain and Scott Brown
University of Missouri
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Retail pork prices averaged $3.991 per pound in grocery stores during December. That was down 7.3 cents from November, but up 23 cents from December 2013. December retail pork prices were the lowest since April.
The average live price for 51-52% lean hogs was $61.24/cwt in December. That was down $2.52 from the month before and the lowest month since January.
The cost of living declined in December for the third consecutive month. The drop is largely due to lower energy prices.
Year-over-year domestic meat demand was up 7.3% in November. That was the 10th consecutive positive month. Domestic pork demand was up 7.1% in November. However, export demand for pork was down nearly 20% in November. It appears that high death loss from the PED virus pushed 2014 U.S. pork prices to levels that were not very competitive on the world market.
USDA's January WASDE publication increased their forecast of 2015 pork production by 1.2% and reduced their 2015 barrow and gilt price estimate by $3/cwt. They are now predicting 4.6% higher pork production this year than in 2014 with market hog prices averaging in the lower $60s live compared to an average live price of $76.03/cwt in 2014. Currently, USDA expects 2015 pork production to exceed beef production by 65 million pounds. The last time the nation produced more pork than beef was 1952.
Friday morning's pork cutout value was $84.08/cwt FOB the plants, up 85 cents from the week before, but down $2.41 from a year ago. Ham and loin prices were higher this week. Belly prices were lower.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $70.27/cwt, down $5.68 from a year ago. The western corn belt and Iowa-Minnesota both averaged $70.27/cwt on today's morning report. There was no negotiated carcass price reported this morning for the eastern corn belt, but mathematically, it had to be close to $70.27/cwt.
Peoria had a top live price today of $47/cwt. The top price Friday for interior Missouri live hogs was $49/cwt which is down $3 from the previous Friday.
Hog slaughter this week totaled 2.276 million head, up 6.4% from the week before and up 0.6% from same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota set a new record last week at 288.0 pounds, up 0.3 pounds from the old record set just the week before and up 5.4 pounds from a year ago.
The February lean hog futures contract closed today at $74.50/cwt, down $4.52 for the week. April hog futures ended the week at $77.67/cwt, down $2.38 from the week before. May hogs lost $1.93 this week to close at $83.37/cwt. The June contract ended the week at $86.65/cwt.
The March corn futures contract lost 13 cents this week to end at $3.87 per bushel. July corn settled at $4.01/bu.
Source: AGEBB