By RON PLAIN
Hog Outlook
This past week was a fabulous week for hog prices. The negotiated carcass price Thursday, April 30, for plant-delivered hogs averaged $72.96 per cwt., which is $9.96 higher than a week earlier. The price rally is being driven by a seasonal decline in hog slaughter and a sharp drop in slaughter weights.
That national negotiated hog price equaled 99.6 percent of the cutout value. The Western Corn Belt negotiated price was 102 percent of the cutout value. Needless to say, packer margins are unsustainably tight. Look for packers to cut their slaughter hours.
Hog slaughter last week totaled 2.164 million head, down 0.9 percent from the week before, but up 7.4 percent from same week last year. Year-to-date hog slaughter is up 5.6 percent, and pork production is up 5.8 percent.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 281.8 pounds, down 1.7 pounds from the week before and down 5.7 pounds from a year ago.
Peoria had a top live price Friday, May 1, of $48 per cwt., $7 higher than the previous Friday. The top price May 1 for interior Missouri live hogs was $48.25 per cwt., up $3.75 from the previous Friday.
Because of low sales volume and confidentiality rules, there were no regional or national negotiated hog carcass price reports May 1.
That morning’s pork cutout value was $73.92 per cwt. FOB the plants. That is up $4.54 from the week before, but down $40.20 from a year ago. For the fourth week in a row, wholesale belly prices are lower than the pork cutout value.
The nation’s gross domestic product grew only 0.2 percent during the first quarter. That could mean a slowdown in meat demand growth lies ahead.
Avian Influenza continues to spread among the nation’s poultry flock. This outbreak looks to become the biggest in U.S. history. Increased bird deaths cut supply; but restrictions put in place by foreign buyers hurt demand.
Cash receipts from hog sales by U.S. farms was a record $26.4 billion dollars in 2014. Eight states had more than a billion dollars in cash receipts from hogs: Iowa, Minnesota, North Carolina, Illinois, Indiana, Missouri, Nebraska and Oklahoma.
The May lean hog futures contract closed Friday, May 1, at $76.00 per cwt., up $4.05 for the week. June hog futures ended the week at $81.25 per cwt., up $1.80 from the week before. July hogs gained $1.30 last week to close at $82.05 per cwt. The August contract settled at $81.97 per cwt.
The USDA estimates that 19 percent of corn acres had been planted by April 26. That is 2 percentage points ahead of last year, but 6 points below the five-year average.
The May corn futures contract settled at $3.5975 per bushel Friday (May 1), which is 4.75 cents lower than a week earlier. September corn ended the week at $3.63 per bushel, off 6.75 cents for the week.
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.
