By RON PLAIN
Hog Outlook
The March Hogs and Pigs Report indicates hog slaughter will stay well above the year-ago level through August. The inventories of market hogs by weight group were from 6 percent to 9.4 percent larger than a year ago.
The death loss from PED virus was much less this winter than last. A year ago, pigs per litter during December-February were down 5.5 percent. This winter, pigs per litter were up 6.7 percent compared to last year and were, at 10.17 head, the highest ever for the winter quarter.
The number of litters farrowed was up 2.4 percent in December-February and are predicted to be up 2.1 percent this spring, but down 2.1 percent this summer. Producers appear to be responding quickly to profits and losses.
My forecast is for daily hog slaughter to be up 6.5 percent in the second quarter, up 9.2 percent in the third quarter, and up 4.1 percent in the fourth quarter compared to a year before. Look for 2015 hog slaughter to be the second highest ever after 2008.
The Friday morning cutout value April 3 was $66.14 per cwt. FOB the plants. That is up 6 cents from the week before but down $66.32 from a year ago. That was the first week without a decline in the cutout value since mid January. Wholesale belly prices are $66.93 per cwt. A year ago wholesale bellies were $202.72 per cwt.
The negotiated carcass price for plant-delivered hogs Thursday averaged $57.09 per cwt., which is $1.13 higher than a week earlier but $68.25 lower than a year ago. Both hog prices and the pork cutout value are less than half of what they were a year ago.
The national average negotiated barrow and gilt carcass price on morning sales April 3 was $55.35 per cwt., up 52 cents from the previous Friday. That morning’s price was 83.7 percent of the pork cutout value. Because of low sales volume and confidentiality rules, there were no Eastern Corn Belt, Western Corn Belt, or Iowa-Minnesota negotiated hog carcass price reports on April 3.
Peoria had a top live price April 3 of $35 per cwt., the same as the previous Friday. The top price for interior Missouri live hogs was $40 per cwt., which is down 75 cents from the previous Friday.
Hog slaughter last week totaled 2.199 million head, down 3.1 percent from the week before, but up 9.2 percent from same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.4 pounds, down 0.8 pound from the week before and down 1.6 pounds from a year ago. This was the first week with Iowa slaughter weights below the year-ago level since the week ending on March 30, 2013. Lighter weights make sense given that hog prices are below the cost of production. They also indicate that producers are pulling ahead on marketings.
Hog futures were higher last week in trading that ended early because of the Good Friday holiday. The April lean hog futures contract closed Thursday at $63.17 per cwt., up $2.05 for the week. May hog futures ended the week at $68.35 per cwt., up 18 cents from the week before. June hogs gained 70 cents this week to close at $75.70 per cwt. The July contract settled at $77.05 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 may write to him in care of this publication.
