By RON PLAIN
Hog Outlook
Calculations by Lee Schulz at Iowa State University put the average profit for Iowa hogs sold during January at $13.28 per head. January was the 13th consecutive profitable month. Dr. Schulz puts the breakeven price at $49.83 per cwt. live or $66.44 per cwt. of carcass. This is the lowest cost of production since December 2007.
Over the last 9 months, the U.S. dollar has strengthened against most major currencies. It is up 10 percent against the Japanese Yen and up 21 percent against the Euro. The trade weighted exchange rate against all major currencies is up 16.5 percent. This strength in the dollar will make it more expensive for foreigners to buy U.S. products and cheaper for Americans to buy foreign products.
West Coast dock workers are back to work at full speed again, after an agreement was reached late Friday (Feb. 20) in negotiations with the Labor Department involved.
The morning pork cutout value Friday, Feb. 20, was $70.84 per cwt. FOB the plants, down $2.32 from the week before and down $26.54 from a year ago. Belly prices were sharply lower again last week and are down 39 percent from a year ago. This was the fifth consecutive week with a lower cutout value.
Thursday’s negotiated carcass price averaged $58.10 per cwt., which was $1.37 higher than a week earlier.
Because of low sales volume and confidentiality rules, there were no Eastern Corn Belt or Iowa-Minnesota negotiated price reports Feb. 20. The Western Corn Belt had a morning average negotiated carcass price of $59.46 per cwt. The national average on the morning report was $58.28 per cwt.
Peoria had a top live price Feb. 20 of $36 per cwt., $2 lower than seven days earlier. The top price Friday, Feb. 20, for interior Missouri live hogs was $40 per cwt., which is down $1.50 from the previous Friday.
Hog slaughter last week totaled 2.285 million head, up 2.8 percent from the week before and up 8.2 percent from the same week last year. Hog slaughter has been above the year ago level for six of the last seven weeks. Compared to a year ago, pork production during the last five weeks was up 6.9 percent.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 285.8 pounds, up 0.2 pound from the week before, up 4.6 pounds from a year ago, and up 10.5 pounds from two years ago. Weights have been above year ago each week since March of 2013.
Hog futures were higher last week. The April lean hog futures contract closed Feb. 20 at $67.40 per cwt., up $1.38 for the week. May hog futures ended the week at $77.30 per cwt., up $1.18 from the week before. June hogs gained $1.17 last week to close at $81.72 per cwt. The July contract ended the week at $81.97 per cwt.
Corn futures were down slightly last week. The March corn contract lost 2 cents to close at $3.85. May corn ended the week at $3.93 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.
