By RON PLAIN
Hog Outlook
The World Trade Organization has once again ruled that the U.S. Country of Origin Labeling (COOL) rules for livestock are a violation of our international trade agreements. It appears the U.S. has three options: 1. stall for time by appealing the WTO decision, 2. live with Canada and Mexico imposing tariffs on goods imported from the U.S. and 3. rewrite our COOL rules for livestock.
The last time the WTO ruled against the U.S. on COOL, the U.S. chose options 1 then 3. (Obviously our COOL rewrite did not satisfy Canada, Mexico or the WTO.) I expect the same course of action this time.
Retail prices of pork were a record high in September for the seventh consecutive month. Pork averaged $4.215 per pound last month. That is up 1.5 cents from the month before and up 42.3 cents from September 2013. Weekly pork production has been trending higher since early July. Are record retail prices slowing movement?
The average live price for 51-52 percent lean hogs was $74.36 per cwt. in September. That is down $6.03 from the month before, but up $6.52 from a year ago.
Stocks of pork in cold storage were down 4.0 percent on Sept. 30 compared to a year ago. Frozen stocks of beef, chicken and turkey were also below year-ago levels.
The pork cutout value was sharply lower again last week. The Oct. 24 morning cutout was $98.20 per cwt. FOB the plants, down $14.56 from the previous Friday, down $25.28 from two weeks ago, but still $3.46 higher than a year ago. Loins, butts, hams and bellies were all lower last week. Wholesale ham prices have lost an astonishing 35 percent of their value in two weeks.
Hog prices were lower last week. The national average negotiated carcass price for direct delivered hogs on the morning report Oct. 24 was $90.28 per cwt., down $7.90 from the prior week. There were no morning price quotes Oct. 24 for the Eastern Corn Belt, the Western Corn Belt or for Iowa-Minnesota. Peoria had a top live price Oct. 24 of $67 per cwt. and interior Missouri’s live top was $66.75 per cwt., which is $5.25 lower than the previous Friday. The Oct. 24 morning hog carcass price was 91.9 percent of the cutout value.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.9 pounds, up 0.4 pound from the week before and 7.8 pounds heavier than the same week last year.
Last week’s hog slaughter totaled 2.141 million head, down 2.1 percent from the week before and down 5.3 percent from the same week last year.
The December hog contract ended the week Oct. 24 at $90.25 per cwt., down 32 cents from the previous Friday. February hogs gained $1.32 last week to close at $88.87 per cwt. The April lean hog futures contract settled at $89.20 per cwt., a gain of $1.70 from the previous Friday. May hogs ended at $89.25 per cwt.
December corn gained 5 cents last week to close at $3.53. March corn settled at $3.6675 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 and Scott Brown may write to them in care of this publication.
