By RON PLAIN
Hog Outlook
Last year, the U.S. exported a record $5.6 billion of pork and $1.0 billion of pork variety meats. That averages out to $62.45 of exports for each U.S. hog slaughtered in 2014.
USDA’s February WASDE report made big changes to the livestock numbers, but only small changes to the crop numbers.
Compared to the January forecasts, USDA increased their estimate of 2015 pork production by 0.8 percent and increased their beef estimate by 1.6 percent. They upped their estimate of broiler production by 0.8 percent and are predicting 2.5 percent more turkey than they forecast in the January WASDE. The across-the-board increase in expected meat production means lower prices. They cut their forecasts of 2015 hog prices by $6.50 per cwt., slaughter steer prices by $3 per cwt., broilers by 3.5 cents per pound and turkeys by 2 cents per pound. USDA expects 2015 barrows and gilt prices to average between $54 and $58 per cwt. of live weight, down from $76.03 per cwt. in 2014.
USDA raised their estimate of corn usage for ethanol production by 75 million bushels but lowered their feed and residual estimate by 25 million bushels. They narrowed their price range but left the midpoint unchanged at $3.65 per bushel. On soybeans, they increased their crush number by 15 million bushels but left their price estimate unchanged at $9.45-$10.95 per bushel.
The morning pork cutout value Friday, Feb. 13, was $73.16 per cwt. FOB the plants, down $1.21 from the week before and down $20.56 from a year ago. Belly prices were sharply lower last week. This is the fourth consecutive week with a lower cutout value.
Thursday’s negotiated carcass price averaged $56.73 per cwt., which was $4.18 lower than a week earlier. Because of low sales volume and confidentiality rules, there were no national or regional negotiated price reports on Feb. 13.
Peoria had a top live price Friday, Feb. 13, of $38 per cwt., $4 lower than seven days ago. The top price Friday for interior Missouri live hogs was $41.50 per cwt., which is down $3.00 from the previous Friday.
Hog slaughter last week totaled 2.222 million head, down 1.2 percent from the week before, but up 6.1 percent from same week last year. Hog slaughter has been above the year ago level for five of the last six weeks. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 285.6 pounds, down 0.8 pound from the week before, but up 4.6 pounds from a year ago. Weights have been above a year ago each week since March of 2013.
The work slowdown at West Coast seaports is putting added pressure on hog and pork prices. Hopefully a settlement in the labor dispute is coming soon. Current hog prices are the lowest since December 2009.
Hog futures were down last week. The February lean hog futures contract closed Friday, Feb. 13, at $62.07 per cwt., down $1.80 for the week. April hog futures ended the week at $66.02 per cwt., down $3.25 from the week before. May hogs lost $1.48 last week to close at $76.12 per cwt. The June contract ended the week at $80.12 per cwt.
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.
