Today USDA-AMS discontinued their daily pork cutout calculation based on voluntary price reporting. Since April 1 when the mandatory wholesale price reports became available on a timely basis, the number of voluntary reports received by USDA has become too low to continue the series.
Weak export demand is one of the reasons that 2013 hog prices have been disappointing. U.S. pork exports were down 12.7 percent in February compared to a year earlier. Pork imports during February were up 1.1 percent. Exports equaled 22.4 percent of February pork production and imports equaled 3.8 percent of production. Of the top eight destinations for pork shipments, only Canada bought more U.S. pork during the first two months of 2013 than a year earlier. Why the sharp drop? The stronger dollar is one reason. The trade weighted value of the dollar was 4.5 percent higher in March than a year ago.
Since late in 2001, USDA-FAS has been releasing weekly data on export sales of beef muscle cuts. They are now doing the same for pork. These sales reports are an indicator of what will ultimately be reported in the monthly export data from USDA.
Live hog imports during February were down 8.5 percent with feeder pig imports down 8.8 percent and other hogs down 6.7 percent.
USDA’s April WASDE predicted 2013 beef production would be down 4 percent, but pork production would be up 1.1 percent and both broiler and turkey production would be up 2.4 percent compared to 2012. Total 2013 red meat and poultry production is forecast to be up 0.2 percent compared to last year. In December, USDA was forecasting 2013 meat production would be down 2.6 percent.
Friday morning’s (April 12) pork cutout calculation based on mandatory price reporting was $80.37 per cwt., FOB Omaha, up 77 cents from the week before. Butts prices were down for the week; hams, bellies, and loins were higher.
The national average negotiated carcass price for direct delivered hogs on the morning report Friday (April 12) was $75.96 cwt., down $1.57 from the previous Friday (April 5). The Eastern Corn Belt averaged $76.07 per cwt., Friday morning (April 12). Neither the Western Corn Belt nor Iowa-Minnesota had enough early day sales for a morning price report. Peoria, Ill., had a top live price Friday morning (April 12) of $53.50 per cwt. Zumbrota, Minn., had a live top Friday (April 12) of $54 per cwt. The top for interior Missouri live hogs Friday was $58.50 per cwt., up $2 from the previous Friday (April 5). The average hog carcass price is 95.4 percent of the calculated cutout value based on mandatory reporting.
Hog slaughter last week (ending April 12) totaled 2.082 million head, down 0.5 percent from the week before, but up 1.4 percent compared to the same week last year. The average barrow and gilt live weight in Iowa-Minnesota last week was 277.2 pounds, up 1.0 pound from a week earlier and up 1.1 pounds from a year ago.
The April lean hog futures contract closed at $82.22 per cwt. today, up $2.20 from the previous week. May hog futures ended the week 47 cents higher at $87.37 per cwt. June hogs settled at $89.90 per cwt. and July at $89.90 per cwt.
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.