By RON PLAIN
Hog Outlook
USDA lowered its forecast of 2014 pork production a tiny bit and lowered their forecast of annual average hog price by $2.50 to $77-$78 per cwt. of live weight. They also lowered their live hog price forecast for next year to $67-$73 per cwt.
July pork exports were down 2.5 percent, and pork imports were up 2.4 percent compared to a year ago. During July, the U.S. exported 22.0 percent of pork production. Imports equaled 4.4 percent of production. Live hog imports were up 1.7 percent during July.
Through the first seven months of the year, U.S. pork exports are up 6.0 percent compared to January-July 2013. That is remarkable given the record prices this year. The big growth market for pork exports is Mexico, which accounts for 70 percent of the increase. Pork imports are up 7.5 percent. Imports of live hogs from Canada were down 6.8 percent during the first seven months of the year.
Domestic pork demand was up 4.0 percent in July. That was the 19th consecutive month with pork demand above the year-ago level.
After seven weeks of decline, hog prices last week were higher for the second week in a row. The national average negotiated carcass price for direct delivered hogs on the morning report Sept. 12, $100.75 per cwt., was up $5.53 from the previous week and up $10.29 compared to a year ago. The Eastern Corn Belt average price was $96.38 per cwt. The Western Corn Belt averaged $103.27 per cwt., and Iowa-Minnesota’s morning average hog price was $103.29 per cwt. Peoria had a top live price Sept. 12 $66 per cwt. There was no interior Missouri price quote that morning.
The pork cutout value was higher again last week. The morning cutout Sept. 12 was $106.55 per cwt. FOB the plants, up $3.73 from the previous Friday and $8.58 above a year ago. That morning hog carcass price was 94.6 percent of the cutout value, which could put pressure on upcoming bids.
Last week’s hog slaughter totaled 2.053 million head, up 15.3 percent from the week before because of the previous week’s Labor Day holiday, but down 5.4 percent from the same week last year. Hog slaughter has been below the year ago level for the last 29 weeks. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.1 pounds, up 1.5 pounds from the week before and 11.4 pounds heavier than the same week last year. This was the 17th consecutive week with weights at least 10 pounds heavier than a year ago.
Hog futures were steady to higher last week. The October hog futures contract ended the week at $105.70 per cwt., up 8 cents from the previous Friday. December hogs gained 85 cents last week to close at $96.30 per cwt. The February lean hog contract settled at $93.55 per cwt., a gain of $2.13.
The September USDA crop report estimated the U.S. average corn yield at a record 171.7 bushels per acre. They estimated soybean yield at a record 46.6 bushels per acre. The old yield records for both crops were set in 2009 at 164.7 bushels for corn and 44.0 bushels for soybeans.
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.
