USDA will release the results of its latest hog inventory survey on June 26. My prediction: breeding herd up 1.8 percent and market hog inventory up 8.5 percent. Lower death loss from the PED virus is the reason for the big gap in the breeding and market herd numbers.
Calculations by Lee Schulz at Iowa State University estimate the average market hog sold in Iowa during May cost $48.75 per cwt of live weight to raise and sold at a profit of $26.25 per head. May was the 12th consecutive month with a lower breakeven price, and the third profitable month this year.
The average retail price of pork during May was $3.696 per pound. That is down 7.3 cents from April, down 40.3 cents from May 2014, and the lowest retail price since July 13.
The average live price for 51-52% lean hogs in May was $57.23 per cwt. That was up $12.10 from April, but down $24.52 from May 2014.
Through mid-June, 2015 hog packer gross margins were lower than last year, but above the long term average.
The Federal Reserve Bank left interest rates unchanged at its June meeting. It also lowered its forecast of 2015 economic growth from a range with a midpoint of 2.5 percent to a midpoint of 1.9 percent. The economy shrank by 0.7 percent in the first quarter. In general, low interest rates are good for farmers, and economic growth is good for meat demand.
The negotiated carcass price for plant delivered hogs Thursday, June 18, averaged $76.23 per cwt, which is $1.19 lower than a week earlier.
Peoria had a top live price June 19 of $50 per cwt, $1 lower than the previous Friday. The top price June 19 for interior Missouri live hogs was $55 per cwt, unchanged from the previous Friday.
The national average negotiated barrow and gilt purchase price on the morning report June 19 was $75.05 per cwt, down $1.68 from the previous Friday. The Western Corn Belt averaged $75.83 per cwt for negotiated purchases June 19, down $1.68 from a week earlier. There was no Eastern Corn Belt or Iowa-Minnesota negotiated price quote June 19.
The morning pork cutout value was $82.18 per cwt FOB the plants. That is down $2.84 from the week before and down $44.48 from a year ago. Boston Butts lost 19 percent of their value last week.
The national negotiated hog price June 19 equaled 91.3 percent of the cutout value.
Hog slaughter last week totaled 2.140 million head, up 0.6 percent from the week before and up 13.5 percent from same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.9 pounds, down 1.2 pounds. That was the twelfth consecutive week with weights lighter than last year.
The July lean hog futures contract closed June 19 at $75.75 per cwt, down $2.30 for the week. August hog futures ended last week at $73.82 per cwt, down $2.90 from the week before. October hogs lost $3.08 last week to close at $64.27 per cwt. The December contract settled at $61.65 per cwt.
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.
