By RON PLAIN
Hog Outlook
USDA’s Foreign Ag Service released 2015 projections for global meat production and trade a couple of weeks ago. Projections show an increase in world pork production of 1.1 percent next year, compared to a 1.4 percent decline for beef production and 1.5 percent growth for chicken.
China and the European Union continue as the world’s top two pork producers, with the United States at No. 3. Projected U.S. growth of 5.1 percent in 2015 trails only that of Russia (6.4 percent) among major producers. China, and to a lesser extent, Mexico and South Korea are expected to increase pork imports next year, while Brazil, the United States and the European Union see the largest jump in projected exports.
The U.S. Trade Representative announced last week that a final agreement on the Trans-Pacific Partnership (TPP), a trade agreement being negotiated by 12 Pacific Rim countries including the United States, is not expected to be announced in the coming month. A USDA/ERS report released last week assessing the impact of eliminating tariffs and tariff-rate quotas by 2025 (one hypothetical TPP scenario) found that U.S. meat export value could be $1 billion higher due to TPP by 2025.
The value of U.S. meat imports would grow about one-fourth of that amount. Crucial to any timeline of concluding TPP is whether a trade promotion authority bill can be passed through the U.S. Congress.
Hog prices fell again last week. Though there was no quote for the national average negotiated carcass price for direct delivered hogs on the Oct. 31 report, the Oct. 30 quote was $83.68 per cwt., down for the 13th consecutive day and $6.60 lower than Oct. 24. There were also no morning price quotes on Oct. 31 for the Eastern Corn Belt, the Western Corn Belt or for Iowa-Minnesota.
The pork cutout value was down last week, but not as much as the hogs. The Oct. 31 cutout was $96.93 per cwt. FOB the plants, down $1.27 from Oct. 24, but $3.32 higher than a year ago. Picnics, bellies and hams gained relative to Oct. 24, while loins, butts and ribs were down. The Oct. 30 hog carcass price was 85.5 percent of the cutout value.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.8 pounds, down 0.1 pound from the week before but still 7.0 pounds heavier than the same week in 2013.
Last week’s hog slaughter totaled 2.193 million head, up 2.4 percent from the week before but down 3.4 percent from the same week last year. This year’s year-to-date slaughter is 5.3 percent below 2013.
The December hog contract ended the week at $88.02 per cwt., down $2.23 from Oct. 24. February closed at $88.05, down 82 cents. The April lean hog futures contract lost 5 cents to $89.15 per cwt., and May hogs gained $1.15 last week to $90.40 per cwt.
The Oct. 31 Ag Prices report showed that the preliminary October corn price fell for the fifth consecutive month, coming in at $3.28. However December corn closed at $3.77, up 24 cents from Oct. 24 and at the highest close since mid-August.
Meanwhile December soybean meal futures finished at $389 per ton, up $39 from Oct. 24 and $90 per ton higher than last month’s close.
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 may write to him in care of this publication.
