By RON PLAIN
Hog Outlook
USDA’s September hog inventory survey gives much the same outlook as the June survey. My current forecast of 2015 hog slaughter is 110.606 million head. That is 49,000 head higher than my prediction following the June hogs and pigs report. The September hog inventory came in a bit higher than the average of trade forecasts, but it didn’t have much impact on futures prices. Hog futures had a mostly uneventful week and ended mixed. The October hog contract ended the week Oct. 3 at $105.60 per cwt., down 92 cents from the previous Friday. December hogs lost $1.45 last week to close at $93.02 per cwt. The February lean hog futures contract settled at $90.65 per cwt., a gain of $1.15 from the previous Friday. April hogs ended at $91.30 per cwt.
The jobs report released Oct. 3 said 248,000 jobs were added to the U.S. economy during September. That’s the biggest number since June and is a sign of economic growth, which should be positive for domestic meat demand.
The U.S. dollar has strengthened against foreign currency for 12 consecutive weeks. That is good news for importers, but bad news for U.S. exports. U.S. agriculture is a big exporter.
Most year-over-year price comparisons are absent from this report because there were almost no USDA market reports issued during early October of last year due to budgetary disputes that caused a partial shutdown of the federal government.
Hog prices were higher again last week. The national average negotiated carcass price for direct delivered hogs on the morning report Oct. 3 was $104.11 per cwt., up $2.81 from last week. There were no morning price quotes Oct. 3 for the Eastern Corn Belt, the Western Corn Belt or Iowa-Minnesota. Peoria had a top live price Oct. 3 of $72 per cwt., and interior Missouri’s live top was $76.25 per cwt., which is $1.25 higher than the previous Friday.
The pork cutout value moved higher for the fifth consecutive week. The morning cutout Oct. 3 was $124.43 per cwt. FOB the plants, up $4.26 from the previous Friday. The hog carcass price was only 83.7 percent of the cutout value, which should be supportive for this week’s hog price bids.
Last week’s hog slaughter totaled 2.09 million head, down 0.2 percent from the week before and down 5.8 percent from the same week last year. Hog slaughter has been below the year-ago level for the last 32 weeks.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.6 pounds, up 1.7 pounds from the week before and 11.0 pounds heavier than the same week last year. This was the 20th consecutive week with weights at least 10 pounds heavier than a year ago. Year-to-date hog slaughter is down 5.3 percent, but because of heavier weights, pork production is down only 1.7 percent.
Corn futures ended the week largely unchanged Oct. 3 from the previous Friday. December corn closed at $3.2325 per bushel, and March corn settled at $3.3625 per bushel.
The views and opinions expressed in this column are those of the authors and not necessarily those of Farm World. Readers with questions or comments for Ron Plain and Scott Brown may write to them in care of this publication.
