Ron Plain Hog Outlook: No Surprises In USDA Report.

Hog Outlook

Ron Plain and Scott Brown
Ag Economics, Missouri University
October 2, 2015

USDA’s September Hogs & Pigs report had no big surprises. The market hog inventory was up 3.9% on September 1 which is the same as the average of pre-release trade predictions. The 180 pounds plus weight group was up 9.5%, 120-179 pounds group up 8.0%, 50-119 pounds up 3.0%, and under 50 pounds down 0.5%. Based on preliminary numbers, September hog slaughter was up 10.3%. So, USDA’s heavy weight number may be a tad bit low.

The farrowing numbers in the September hog survey were somewhat bearish as both summer and fall farrowings were down less than both the average trade prediction and the June Hogs & Pigs forecast. USDA said that June-August farrowings were down 1.6%. The average of pre-release trade forecasts were for summer farrowings to be down 1.9%. The June Hogs & Pigs report predicted June-August farrowings would be down 2.5%. USDA said farrowing intentions for September-November are down 2.5%. The pre-release trade average was for down 2.8%. The June inventory report predicted fall farrowings would be down 4.3%. USDA said December-February farrowing intentions are likely to be down 0.7%. The trade estimate was down 0.9%.

USDA said pigs per litter during June-August were a record 10.39 head which is up 2.3% from a year ago. Producers have quickly learned how to cope with the PED virus.

Thursday’s negotiated carcass price for plant delivered hogs averaged $70.65/cwt which is $1.89 higher than a week earlier.

The national negotiated barrow and gilt price on the morning report today was $69.83/cwt, up $3.10 from last Friday morning. The western corn belt averaged $70.71/cwt this morning, up $1.87 for the week. There were no negotiated price quotes this morning for the eastern corn belt or Iowa-Minnesota.

Peoria had a top live price today of $44/cwt, up $1 from last Friday. The top price today for interior Missouri live hogs was $48.25/cwt, up $2.25 from the previous Friday.

This morning’s pork cutout value was $86.51/cwt FOB the plants. That is up $2.22 from the week before. This morning’s national negotiated hog price was only 80.7% of the cutout value.

This week’s hog slaughter totaled 2.27 million head, down 0.3% from last week, but up 8.9% from the same week last year.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 279.7 pounds, up 0.8 pound from a week earlier, but down 4.9 pounds from a year ago. This was the 27th consecutive week with weights lighter than last year.

The October lean hog futures contract settled today at $73.35/cwt, up $1.47 for the week. December hog futures ended the week at $65.375/cwt, down 40 cents from the week before. February hogs lost 73 cents this week to close at $68.225/cwt. April closed at $72.125/cwt.

The December corn futures contracted settled at $3.8925 per bushel today. That is up a quarter of a cent from last Friday.