Hog Outlook
Glenn Grimes & Ron Plain
University of Missouri - Columbia

USDA’s latest cold storage report said the stocks of frozen pork on June 30 were down 8 percent from the month before and down 29 percent compared to a year earlier.

Frozen pork stocks are at the lowest level since September 2005. Year-over-year, frozen stocks of beef were down 14 percent and turkey was down 15 percent, but chicken was up 2 percent compared to June 30, 2009. Tight meat supplies are a big part of the strong livestock prices this summer.

Pork bellies in cold storage were down a whopping 54 percent compared to June 30, 2009. Low belly stocks at the start of BLT season have pushed pork belly prices to the highest level since sometime before 1998, when my data series begins.

USDA’s Thursday afternoon wholesale pork price report said bellies were trading at $133.33 per cwt., up $13.37 from the week before and $49.22 higher than a year ago.

The calculated pork cutout value on July 29 was $89.38 per cwt., up $3.87 from the previous Thursday. Loins, hams, butts and bellies were all higher this week.

The higher cutout value made possible the highest hog prices since mid-May. The national weighted average carcass price for negotiated hogs Friday morning was $81.99 per cwt., $4.35 higher than the previous Friday. Regional average prices on Friday morning were: eastern Corn Belt $82.22, western Corn Belt $79.76 and Iowa-Minnesota $79.57 per cwt.

The top live hog price Friday was $58per cwt. at Sioux Falls, $53 at Peoria, and $56.50 at Zumbrota. The interior Missouri live top Friday was $56.50 per cwt., up $3 from the previous Friday.

This week’s hog slaughter totaled 1.949 million head, down 0.3 percent from the week before and down 7.3 percent compared to slaughter during the same week last year.

Since June 1, barrow and gilt slaughter has been 4.3 percent below last year and 1.6 percent lower than indicated by the market hog inventory in the June hogs and pigs report. Year-to-date, pork production is down 4 percent.

The average carcass weight of barrows and gilts slaughtered the week ending July 17 was 199 pounds, unchanged from the week before and up 3 pounds compared to a year ago. Iowa-Minnesota live weights last week averaged 268.4 pounds, up 2.1 pounds compared to a year earlier. It’s been hot and last summer was cool, but hog weights are still up.

The August lean hog futures contract ended last week at $85.82 per cwt., up $2.60 from the previous Friday. The October contract settled at $79.02, up $2 for the week. December closed the week $1.05 higher, at $75.40 per cwt.

The September corn contract ended the week at $3.92-3/4, up 22 cents from the previous Friday. September soybean meal futures gained $7.50 this week to settle at $297.90 a ton.

This week the House Ag Committee passed legislation to renew for five years the mandatory price reporting law which is set to expire on Sept. 30. This legislation also adds mandatory wholesale pork price reporting by packers and pork export reporting to the law.

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 Glenn Grimes or Ron Plain may write to them in care of this publication.