A rare event is occurring: ham prices are currently above belly prices. On this morning's report, wholesale hams were worth $101.83/cwt and bellies were worth 100.86/cwt. This is BLT season when bellies are usually close to their yearly high. This year, the peak in bellies prices was $203.53/cwt on April 7. At that time there was fear that the PEDV would create a pork shortage and we would run out of bacon this summer. A lot of bellies were put in cold storage this spring and that became a drag on belly prices this summer.
This week's hog slaughter totaled 1.78 million head, down 10.1% from the week before due to Monday's Labor Day holiday, and down 10.2% from the same week last year. Hog slaughter has been down more than 7.0% for 8 of the last 10 weeks.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.6 pounds, down 1.5 pounds from the week before, but 10.4 pounds heavier than the same week last year. This was the 16th consecutive week with weights at least 10 pounds heavier than a year ago.
Hog futures were higher this week. The October hog futures contract ended the week at $105.62/cwt, up $7.50 from the previous Friday. December hogs gained $3.45 this week to close at $95.45/cwt. The February lean hog contract settled at $91.42/cwt, a gain of 60 cents. The big gain by the October contract plus its large premium over the cash market makes us optimistic about cash hog prices gaining more next week.
Source: AGEBB