By RON PLAIN
Hog Outlook
Friday’s USDA WASDE report increased expected 2015 pork production by 0.5 percent, but it left 2016 production essentially unchanged.
In their first forecast since the June inventory report, USDA predicts 7.6 percent more pork this year than last and 0.5 percent more pork in 2016 than this year.
USDA expects barrow and gilt prices to average close to $50 per cwt live this year and in the upper $40s next year.
U.S. pork imports were down 2.3 percent in May. More pork was imported from Canada but less from Poland and Denmark than in May 2014. Pork exports during May were up 1.5 percent compared to 12 months earlier. The increase in exports was due to a big jump in pork shipments going to South Korea. May pork imports equaled 4.4 percent of U.S. production and exports equaled 23.5 percent of production.
During the first five months of the year, pork imports were up 19.2 percent and exports were down 5.7 percent compared to January-May 2014.
Hog imports were up 6.7 percent in May. Domestic pork demand was down 0.9 percent in May, and foreign demand for U.S. pork was down 11.6 percent. This was the first decline in domestic pork demand since December 2012. Export demand was down for the 10th consecutive month.
The negotiated carcass price Thursday, July 9, for plant delivered hogs averaged $77.35 per cwt, which is $4.14 higher than a week earlier. There was no national negotiated barrow and gilt price quote on the morning report July 9.
The Western Corn Belt and Iowa-Minnesota both averaged $76.63 per cwt for negotiated purchases July 9. The Western Corn Belt was $2.81 higher than the previous week. There was no Eastern Corn Belt negotiated price quote July 9 in the morning. Peoria had a top live price that day of $49 per cwt, $1 higher than the previous Friday. The top price July 9 for interior Missouri live hogs was $53.50 per cwt, up 75 cents from the previous Friday.
The morning pork cutout value was $80.80 per cwt FOB the plants. That is up 32 cents from the week before. Loin and ham prices were lower last week and bellies higher.
Packer margins are tight. This Western Corn Belt’s morning negotiated hog price July 9 equaled 94.8 percent of the cutout value.
Last week’s hog slaughter totaled 2.079 million head, up 12.0 percent from the previous week and up 11.7 percent from the same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 279.0 pounds, up 0.4 pound from a week earlier, but down 5.2 pounds from a year ago. This was the 15th consecutive week with weights lighter than last year.
The July lean hog futures contract closed July 9 at $78.97 per cwt, up 20 cents for the week. August hog futures ended the week at $73.65 per cwt, down $2.72 from the week before. October hogs lost $3.82 last week to close at $62.45 per cwt. The December contract settled at $59.97 per cwt.
Corn futures moved higher again last week. The July corn contract settled at $4.2725 per bushel, up 8 cents from the previous week.
December corn ended the week at $4.45 per bushel.
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.
