Ron Plain Hog Outlook: USD Negative For Pork Trade.

Ron Plain and Scott Brown
University of Missouri
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The strong dollar continues to be a negative factor for U.S. trade. Meat imports are up and exports of pork, beef, turkey and chicken are each lower than during the first half of 2014.

During the first half of 2015, pork exports were down by 127.1 million pounds (4.8%) and imports were up by 90.1 million pounds (19.9%). Canada shipped 76.4 million pounds more while Poland sent the U.S. 10.3 million pounds more than in January-June 2014. Exports to China declined by 141 million pounds compared to the first half of 2014.

Pork imports totaled 95.5 million pounds in June while exports totaled 413 million pounds. Pork imports were up by 17.9 million pounds with shipments from Canada up 19.7 million pounds.

Pork exports were up a slim 0.1% compared to June 2014. Mexico and South Korea were the two biggest growth markets for U.S. pork while Japan and Canada bought less.

U.S. pork exports during June equaled 20.7% of production. Pork imports equaled 4.8% of U.S. production.

U.S. per capita expenditures for pork were up 1.2% in June. Domestic meat demand was up 3.5% in June with stronger demand for pork, beef and chicken, but weaker demand for turkey.

Foreign demand for U.S. pork was down 14.7% in June. This was the 11th consecutive month with weak export demand.

Thursday's negotiated carcass price for plant delivered hogs averaged $74.23/cwt which is 34 cents lower than a week earlier. The national negotiated barrow and gilt price on the morning report today was $73.31/cwt, up 4 cents from last Friday morning. The western corn belt averaged $68.61/cwt this morning, down $5.22 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 $48/cwt, unchanged from last Friday. The top price today for interior Missouri live hogs was $54.25/cwt, also unchanged from the previous Friday.

This morning's pork cutout value was $90.41/cwt FOB the plants. That is up $5.03 from the week before. Ham and belly prices were both up by more than $10/cwt this week. This morning's national negotiated hog price was only 81.1% of the cutout value. Look for either higher hog prices or lower cutout values as we move through next week.

This week's hog slaughter totaled 2.126 million head, down 0.3% from last week, up 10.3% from the same week last year, and the tenth 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 276.2 pounds, down 1.6 pounds from a week earlier and down 7.4 pounds from a year ago. This was the nineteenth consecutive week with weights lighter than last year.

The August lean hog futures contract settled today at $77.32/cwt, down $1.18 for the week. October hog futures ended the week at $64.12/cwt, up 40 cents from the week before. December hogs gained 2 cents this week to close at $60.47/cwt.

Source: AGEBB