University of Missouri-Columbia 

 

Triumph Foods and Seaboard Foods announced plans last week for a joint venture to build a hog slaughter plant in Sioux City, Iowa. The plant is expected to cost $264 million, slaughter 3 million hogs per year and begin operating in the summer of 2017.

Triumph currently operates the nation’s newest large hog slaughter plant, which opened in January 2006 in St. Joseph, Mo. Seaboard operates the second newest big plant, which opened in 1995 in Guyman, Okla. In December, Clemens Foods announced plans to build a $255 million hog slaughter plant in Coldwater, Mich.

The May WASDE contained its first forecast of 2016 production and prices. USDA expects 2016 pork production to be up 1.2 percent from this year, and they expect this year to be up 6.8 percent from last year. Barrow and gilt prices averaged $76.03 per cwt. live in 2014. They are looking for prices to be $26-$28 lower this year and another $2-$4 lower in 2016 than this year.

Last week was the seventh consecutive week with higher hog prices. The average negotiated carcass price Thursday, May 14, for plant delivered hogs was $79.39 per cwt., which is $1.88 higher than a week earlier.

The national average negotiated barrow and gilt purchase price on the morning report May 15 was $80.05 per cwt., up $3.66 from a week earlier. The Western Corn Belt averaged $81.49 per cwt., and Iowa-Minnesota had a morning average of $81.83 per cwt. There was no Eastern Corn Belt negotiated price quote the morning of May 15.

Peoria had a top live price of $54 per cwt., $2 higher than the previous Friday. The top price May 15 for interior Missouri live hogs was $55 per cwt., up 75 cents from the previous Friday.

The morning pork cutout value May 15 was $83.56 per cwt. FOB the plants. That was up $4.51 from the week before but down $29.22 from a year ago. For the sixth week in a row, wholesale belly prices are lower than the pork cutout value.

Hog slaughter last week totaled 2.128 million head, up 0.8 percent from the week before and up 6.5 percent from same week last year. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 281.2 pounds, down 0.8 pound from the week before and down 5.4 pounds from a year ago. This was the seventh consecutive week with weights lighter than last year.

The June lean hog futures contract closed May 15 at $83.35 per cwt., down $1.47 for the week. July hog futures ended the week at $83.92 per cwt., unchanged for the week. August hogs lost 20 cents to close at $84.02 per cwt. The October contract settled at $73.65 per cwt.

USDA estimates that 75 percent of corn acres had been planted by May 10. That is 20 points ahead of last week, 20 points ahead of last year, and 18 points ahead of the five-year average. The May WASDE predicted this fall’s corn harvest to be 13.63 billion bushels, down 4.1 percent from last year’s record and the third largest ever.

The July corn futures contract settled at $3.655/bushel May 15, up 2.5 cents from a week earlier.

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.