Hog Outlook by Ron Plain 

 

The December hog inventory survey said the nation’s swine herd was up 2.0 percent from December 2013, with the market hog inventory up 1.8 percent and the breeding herd up 3.7 percent. These numbers were a bit larger than the average of trade expectations. The number of litters farrowed this fall was up 3.3 percent. The survey predicted December-February farrowings will be up 3.9 percent and spring farrowings up 3.2 percent compared to a year ago. Pigs per litter during September-November averaged 10.23 head, up 0.7 percent from a year ago. This implies that death loss from the PED virus has moderated. Pigs per litter during December-May was down 5.3 percent. The September-November pig crop was up 4.0 percent year-over-year and was the first quarter that the pig crop has been larger than a year ago since June-August of 2013.

I expect hog slaughter to be 4.6 percent higher in 2015 than this year and carcass hog prices to average close to $84 per cwt.

All year long, there have been lots of pork bellies in cold storage. In July and August, frozen bellies were more than double a year earlier. At the end of November, frozen belly stocks were down 30 percent year over year. This was the first time pork belly stocks were below year-ago since June of 2013.

The total amount of pork in cold storage at the end of November, 485.796 million pounds, was the lowest of any month since December 2011. This may not be as positive as it sounds, since low pork stocks may reflect declining export demand.

The morning pork cutout value Friday, Dec. 26, was $87.14 per cwt. FOB the plants, up 71 cents from the week before and up $3.31 from a year ago. Loins and bellies were higher last week, hams were lower.

The national average negotiated carcass price for direct delivered hogs on the morning report Dec. 26 was $72.96 per cwt., down $2.72 from the previous Friday and down $2.36 from a year ago. The Western Corn Belt and Iowa-Minnesota both averaged $74.12 per cwt. on the Dec. 26 morning report. There was no negotiated carcass price reported that day for the Eastern Corn Belt. The morning’s average hog carcass price was only 83.7 percent of the pork cutout value.

Peoria had a top live price Dec. 26 of $50 per cwt. The top price for interior Missouri live hogs was $53.50 per cwt., which was $3.50 lower than the previous Friday.

Because of USDA’s holiday schedule, there was no report Dec. 26 on weekly hog slaughter.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week, 285.2 pounds, was down 0.2 pound from a week earlier but up 4.6 pounds from a year ago. That was the 90th consecutive week with weights above the year-earlier level.

The February lean hog futures contract closed Dec. 26 at $81.55 per cwt., down 35 cents for the week. April hog futures ended the week at $84.20 per cwt., up $1.00 from the week before. May hogs gained 53 cents last week to close at $87.70 per cwt. The June contract ended the week at $90.77 per cwt.

Corn futures were higher again last week. The March contract gained 4 cents to end at $4.1475 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 may write to him in care of this publication.