By RON PLAIN
Hog Outlook
USDA says the breeding herd was up 2.2 percent on March 1 and the market hog inventory was up 7.7 percent compared to last year.
The average price of pork at retail was $3.941 per pound during February. That is down 4.8 cents from the month before and down 21.4 cents from a year earlier. Pork prices in grocery stores have declined for five consecutive months.
The average live price for 51-52 percent lean hogs was $45.75 per cwt. during February. That was down $8.30 from January and down $18.13 from a year ago.
The rapid decline in live hog prices relative to retail pork prices has left middlemen with very good margins. The wholesale-retail pork price spread was a record $2.542 per pound in February. That was the fourth consecutive monthly record.
There were 686 million pounds of pork in cold storage at the end of February. That was 15 percent more than the month before and 5 percent more than a year ago. This is the most frozen pork in storage since April 30, 2013. The large stocks are likely due in part to the slowdown in West Coast exports earlier this year.
Both hog and pork prices are sharply lower than at this time last year. The morning pork cutout value Friday, March 27, was $66.08 per cwt. FOB the plants. That is down $1.44 from the week before and down $64.85 from a year ago. This is the tenth consecutive week with a lower cutout value. Wholesale ham prices and belly prices are both down 64 percent compared to a year ago.
Thursday’s negotiated carcass price for plant delivered hogs averaged $55.96 per cwt., which is $1.93 lower than a week earlier and $69.20 lower than a year ago.
The national average negotiated barrow and gilt carcass price on morning sales March 27 was $54.83 per cwt. The Eastern Corn Belt also averaged $54.83 that morning. That is 83 percent of the pork cutout value. Because of low sales volume and confidentiality rules, there were no Western Corn Belt or Iowa-Minnesota negotiated hog carcass price reports March 27.
Peoria had a top live price Friday, March 27, of $35 per cwt., $2 lower than seven days earlier. The top price Friday for interior Missouri live hogs was $40.75 per cwt., which was down $1.50 from the previous Friday.
Hog slaughter last week totaled 2.27 million head, up 1.5 percent from the week before and up 11.8 percent from same week last year. Hog slaughter has been above the year ago level for the last 10 weeks.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.2 pounds, up 0.2 pound from the week before and up 0.3 pounds from a year ago. This was the 103rd consecutive week with Iowa slaughter weights above the year-ago level.
Hog futures were mostly higher last week. The April lean hog futures contract closed Friday, March 27, at $61.10 per cwt., up $2.65 for the week. May hog futures ended the week at $68.20 per cwt., down 7 cents from the week before. June hogs gained $1.10 last week to close at $74.95 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.
