Hog Outlook
Ron Plain and Scott Brown
University of Missouri
June 1, 2012
Iowa State University calculations estimate the typical Iowa hog sold during April was marketed at a loss of $9.62 per head. For the first four months of 2012, the average hog was sold at a loss of $1.99. Shane Ellis’ calculations put the cost of production in April at $64.58/cwt of live weight, the highest since December and the highest ever for April.
This week’s news for the U.S. economy was not good. On Thursday the government lowered its estimate of first quarter growth from 2.2% to 1.9%. Today they said the unemployment rate increased to 8.2% in May from 8.1% in April. The economy added only 69,000 new jobs in May, the fewest in a year.
USDA says 72% of the corn crop was in good or excellent condition on May 27. That compares to 77% the week before and 63% a year ago. The Crop Progress report says 89% of the soybean crop was planted by May 27 compared to an average of only 61% on that date. July corn futures ended the week at $5.515/bu, down 27 cents from the previous Friday. December corn settled at $5.10/bu, down 12 cents for the week.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.36/cwt, up $1.26 from last Friday. The eastern corn belt averaged $81.53/cwt this morning. Iowa-Minnesota averaged $80.46/cwt. The western corn belt had an average of $80.50 on the morning report. Both Peoria and Zumbrota had a top today of $56/cwt of live weight. The top for interior Missouri live hogs Friday was $58.50/cwt, down $2.25 from the previous Friday.
USDA’s Thursday afternoon calculated cutout value was $81.95/cwt, up $3.75 from the previous Thursday, but $6.52 lower than on this date last year. Loins, butts, bellies and hams were all higher this week. The negotiated hog carcass price this morning is 99.3% of the pork cutout value.
Hog slaughter totaled 1.822 million head this week, down 11.9% from the week before (due to the Memorial Day holiday on Monday), but up 4.5% compared to the same week last year. Barrow and gilt carcass weights for the week ending May 19 averaged 205 pounds, down 1 pound from the week before but up two pounds from a year ago. The average barrow and gilt live weight in Iowa-Minnesota last week was 274.3 pounds, down 1.8 pounds from a week earlier, up 4.4 pounds from a year ago, and above a year earlier for the 27th consecutive week. Year-to-date, pork production is up 2.2%.
Friday’s close for the June lean hog futures contract was $90.72/cwt, up $5.52 from the previous Friday. The July hog futures contract settled at $91.52/cwt, up $4.95 for the week. August ended the week at $91.30.