By RON PLAIN
Hog Outlook
Retail pork prices peaked in September 2014 and have declined each month since. But the rate of decline has been slower than the drop in hog prices, causing retailers’ margins to widen.
The average price of a pound of pork at retail was $3.893 during March. That was 4.8 cents lower than the month before but 6.3 cents higher than a year ago. The average live price of 51-52 percent lean hogs in March, $45.61 per cwt., was down 14 cents from the month before and down $38.21 from a year ago. The sharp drop in hog prices has left the wholesale-retail pork spread at a record $2.563 per pound. A tighter price spread should boost pork movement.
Beef prices are very high compared to pork. In March, the average retail price of ground beef ($4.20 per pound) was slightly higher than the average price of boneless pork chops ($4.196 per pound). Over the last four years, high bacon prices have boosted retail pork prices, but that is changing. March bacon prices were the lowest since June 2013.
The morning pork cutout value April 17 was $66.63 per cwt. FOB the plants. That is up 91 cents from the week before but down $55.67 from a year ago. For the second week in a row, wholesale belly prices were lower than the pork cutout value.
The negotiated carcass price April 16 for plant delivered hogs averaged $62.14 per cwt., which is $4.10 higher than a week earlier but $48.95 lower than a year ago.
The national average negotiated barrow and gilt carcass price on morning sales April 17 was $61.19 per cwt., up $2.45 from the previous Friday. Friday morning’s price (April 17) was 91.8 percent of the pork cutout value. The Western Corn Belt averaged $61.37 per cwt. on April 17. Because of low sales volume and confidentiality rules, there were no Eastern Corn Belt or Iowa-Minnesota negotiated hog carcass price reports that day.
Peoria had a top live price April 17 of $40 per cwt., $2 higher than the previous Friday. The top price for interior Missouri live hogs was $44.50 per cwt., up $4.50 from the previous Friday.
Hog slaughter last week totaled 2.243 million head, up 3.3 percent from the week before and up 12.0 percent from same week last year. Year-to-date hog slaughter is up 5.2 percent, and pork production is up 5.6 percent.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.8 pounds, up 0.3 pound from the week before, but down 1.9 pounds from a year ago.
The May lean hog futures contract closed April 17 at $70.52 per cwt., down $1.25 for the week. June hog futures ended the week at $76.27 per cwt., down $1.88 from the week before. July hogs also lost $1.88 last week to close at $77.47 per cwt. The August contract settled at $77.50 per cwt.
The May corn futures contract settled at $3.7975/bushel, which is 3 cents lower than a week earlier. September corn futures ended last week at $3.94 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.
