By Ron Plain
Hog Outlook
Retail pork prices set new records last month. The average price of a pound of pork in grocery stores during August was $4.20. That was 7.3 cents higher than the month before and 44.3 cents higher than in August 2013. This was the sixth consecutive month with a new retail price record for pork. Retail beef prices are also at record highs.
Daily hog slaughter was 2.1 percent higher in August than in July, but retail pork movement was slowing due to higher retail pork prices. As a result, cash hog prices fell sharply from early July till late August. The wholesale-retail price spread was a record $2.251 per pound in August.
The Iowa State University hog profit series estimates that the typical Iowa hog marketed in August earned a profit of $57.45 per head. August profits were sharply lower than the month before, but August was still one of the 10 most profitable months. Lee Schulz at ISU estimates the average Iowa cost of production was $54.67 per cwt. live during August. That was the lowest cost since October 2010.
Hog prices were generally steady last week. The national average negotiated carcass price for direct delivered hogs on the morning report Friday, Sept. 19, was $100.01 per cwt., down 74 cents from the previous week but up $7.04 compared to a year ago. There were no morning price quotes Sept. 19 for the Eastern Corn Belt, the Western Corn Belt or Iowa-Minnesota. Peoria had a top live price Sept. 19 of $67 per cwt., and interior Missouri’s live top was $72.75 per cwt.
The pork cutout value moved higher last week. The cutout Sept. 19 was $114.53 per cwt. FOB the plants, up $7.98 from the previous Friday and $15.15 above a year ago. The hog carcass price was only 87.3 percent of the cutout value.
Last week’s hog slaughter totaled 2.05 million head, down 1.5 percent from the week before and down 5.9 percent from the same week last year. Hog slaughter has been below the year-ago level for the last 30 weeks. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 281.9 pounds, down 0.2 pound from the week before, but 11.0 pounds heavier than the same week last year. This was the 18th consecutive week with weights at least 10 pounds heavier than a year ago.
Hog futures were steady to lower last week. The October hog futures contract ended the week at $105.97 per cwt., up 27 cents from the previous Friday. December hogs lost $1.45 last week to close at $94.85 per cwt. The February lean hog contract settled at $91.40 per cwt., a loss of $2.15 from the previous Friday. April hogs ended last week at $90.10 per cwt.
The December corn futures contract ended the week Sept. 19 at $3.315 per bushel, down 8 cents for the week. March corn closed at $3.3425, up 6 cents from the previous Friday. The October soybean meal futures contract ended the week at $324.10 per ton, down $14.40 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 and Scott Brown may write to them in care of this publication.
