By Ron Plain and Scott Brown
University of Missouri
July 17, 2015
The Consumer Price Index for June was up 0.1% from a year ago making June the first up month since December. Low energy prices kept the cost of living below year-ago levels in January-May. When food and energy prices are excluded, the CPI was up 1.76% year-over-year in June. The annual inflation rate, excluding food and energy, has been between 1.57% and 1.96% each of the last 30 months. That is remarkably stable and slightly below the Federal Reserve Bank's target range.
The average retail price of pork in June was $3.703 per pound. That was up 0.7 cents from the month before, but down 41.3 cents from a year ago.
The average price for 51-52% lean hogs was $57.25/cwt live in June. It was 2 cents higher than in May, but $28.10 lower than a year ago.
The June price spread between farm and retail pork prices was 7.2 cents greater per pound than a year ago. The wholesale-to-retail spread was up 15.4 cents per pound while the packer spread was down 8.2 cents compared to June 2014. A tighter price spread would help speed pork sales. It will have to come at the retail level rather than the packer level.
Thursday's negotiated carcass price for plant delivered hogs averaged $75.66/cwt which is $1.69 lower than a week earlier. The national negotiated barrow and gilt price on the morning report today was $74.56/cwt. The western corn belt and Iowa-Minnesota both averaged $74.57/cwt for negotiated purchases this morning. Both were $2.06 lower than last week. There was no eastern corn belt negotiated price quote this morning.
Peoria had a top live price today of $50/cwt, $1 higher than last Friday. The top price today for interior Missouri live hogs was $53.50/cwt, unchanged from the previous Friday.
This morning's pork cutout value was $81.67/cwt FOB the plants. That is up 87 cents from the week before. Loin, ham and belly prices were all higher this week. This morning's national negotiated hog price equaled 91.3% of the cutout value.
This week's hog slaughter totaled 2.079 million head, up 12.0% from last week, up 11.7% from the same week last year and the seventh consecutive week with a double digit increase in hog slaughter compared to a year ago.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 279.3 pounds, up 0.3 pound from a week earlier, but down 6.2 pounds from a year ago. This was the sixteenth consecutive week with weights lighter than last year.
The August lean hog futures contract settled today at $75.67/cwt, up $2.40 for the week. October hog futures ended the week at $63.45/cwt, up $1.00 from the week before. December hogs gained 70 cents this week to close at $60.67/cwt. The February contract settled at $66.12/cwt.
Corn futures were lower this week. The September corn contract settled at $4.2025/bushel, down 15 cents from last week. December corn ended the week at $4.3125/bushel.