Ron Plain Hog Outlook: Hog Slaughter Has Been High.

Ron Plain and Scott Brown
Ag Economics, MU
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Hog slaughter has been very high in recent days. The preliminary estimate of hog slaughter for the Saturday after Thanksgiving was 377,000 head. If that holds up, it will be the largest Saturday slaughter ever. This week's hog slaughter totaled 2.424 million head, up 13.9% from last week, which was low because of the Thanksgiving holiday, and up 8.4% from the same week last year. This is the largest weekly hog slaughter since the week ending on September 15, 2012.

There were 603 million pounds of pork in cold storage at the end of October. That was down 8% from the month before, but up 13% from a year ago. Frozen beef stocks were up 34% and broiler meat in cold storage was up 31%. Total stocks of frozen red meat were the highest ever for the end of October.

The December jobs report said that 211,000 jobs were added to the economy during November. The unemployment rate held steady at 5%. That is good news for meat demand. It also increases the likelihood that the Federal Reserve Bank will raise interest rates later this month.

Thursday's national negotiated carcass price for hogs to be delivered to the slaughter plant was $52.19/cwt, up $1.29 from a week earlier.

The national negotiated barrow and gilt carcass price on the morning report today was $51.56/cwt, up $1.39 from last Friday morning. The western corn belt averaged $51.95/cwt this morning. There were no negotiated price quotes this morning for the eastern corn belt or for Iowa-Minnesota.

Peoria had a top live price today of $30/cwt, unchanged from last Friday. The top price today for interior Missouri live hogs was $35.25/cwt, up $3.00 from the previous Friday.

This morning's pork cutout value was $73.23/cwt FOB the plants. That is up $2.20 from the week before. Loins were lower, but wholesale hams and belly prices were higher. This morning's national negotiated hog price is 70.4% of the cutout value.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.9 pounds, down 0.4 pound from a week earlier and down 1.5 pounds from a year ago. Iowa-Minnesota weights averaged below last year each week from March 28 through November 14. Slaughter weights were up 0.3 pounds the week ending November 21 then dropped back during Thanksgiving week. Thus far, 2015 barrow and gilt carcass weights are down 1.5 pounds from a year ago.

The December lean hog futures contract settled today at $57.05/cwt, down $1.68 for the week. February hog futures ended the week at $59.10/cwt, up $1.43 from the week before. April hogs gained $1.48 this week to close at $63.225/cwt.

The December corn futures contract settled at $3.7625 per bushel today. That is up 17 cents from last Friday. The March corn contract closed at $3.815/bu. today, up 14 cents for the week.

Source: AGEBB