On April 1, USDA-AMS will begin releasing on a timely basis their new wholesale pork cutout value estimates based on mandatory packer reporting. Packers have been submitting the mandatory pork price data twice daily since early January, but USDA has been publishing the numbers with a one week delay. The purpose of the delay was to make sure the new system was working properly and to allow for comparisons between the new mandatorily reported pork price data and the traditional voluntarily reported price data.
Iowa State University calculations say the typical Iowa market hog sold in January cost $74.13 per cwt., of live weight to raise and was sold at a loss of $25.16 per head. This was the sixth consecutive month with a record cost of production and the sixth consecutive month with red ink.
USDA’s annual report on farm numbers says there were 68,300 U.S. farms with hogs last year, which is 800 fewer than the year before. Of these farms, 8,100 did not own hogs, i.e. they were contract growers.
There were 605 million pounds of pork in cold storage at the end of January. That was up 9.7 percent from the month before and up 3.4 percent compared to a year earlier.
Hog prices are dropping fast. The national average negotiated carcass price for direct delivered hogs on the morning report today (March 1) was $70.43 per cwt., down $4.85 from last Friday (Feb. 22) and down $15.03 from three weeks earlier. Eastern Corn Belt hogs averaged $70.36 this morning (as of March 1). The Western Corn Belt averaged $70.88. Iowa-Minnesota didn’t have a morning price quote.
Peoria, Ill., had a live top of $49 per cwt., on Friday (March 1). Zumbrota, Minn., didn’t have enough hogs for a market test. The top for interior Missouri live hogs today (March 1) was $56.50 per cwt., down 50 cents from the previous Friday (Feb. 22).
Thursday afternoon’s (Feb. 28) calculated pork cutout value was $81.31 per cwt.,, down 47 cents from the previous Thursday (Feb. 21) and down $3.55 from this week last year. Ham prices were higher than a week ago, but loins, bellies, and butts were lower. The national average hog carcass price this morning was 86.6 percent of the cutout value. Two weeks ago, the hog carcass price was above the pork cutout value.
Hog slaughter this week totaled 2.168 million head, up 4.9 percent from last week and up 0.7 percent compared to the same week last year.
The average barrow and gilt live weight in Iowa-Minnesota last week was 276.2 pounds, up 0.9 pound from a week earlier and up 0.4 pound from a year ago. Last week was the first with weights above year-ago since the week ending Jan. 12.
Friday’s close (March 1) for the April lean hog futures contract was $81.12 per cwt., down 53 cents from the previous Friday. May hog futures ended the week 50 cents lower at $89.40 per cwt. June hogs lost 42 cents this week to settle at $91.37 per cwt., today (March 1). July hog futures ended the week at $91.65 per cwt.
Both corn futures and soybean meal futures ended the week higher than the previous Friday.
The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Ron Plain or Scott Brown may write to them in care of this publication.