Ron Plain: Hog Outlook, U.S. Pork Exports

Feb 06, 2015

Ron Plain: Hog Outlook, Hog on U.S. Pork Exports.Bookmark and Share

Ron Plain and Scott Brown

University of Missouri

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U.S. pork exports were down 13.0% in December and down 2.7% for all of 2014. The decline in exports was most pronounced for China and Japan. The biggest growth markets were Mexico and South Korea. Japan had been the biggest foreign buyer for many years, but is now second behind Mexico.

U.S. pork imports were up 35.9% in December and up 14.5% for all of 2014. Most of the increase came from Canada.

The U.S. imported 4.949 million hogs from Canada in 2014. That is 8,334 fewer than in 2013 and the lowest yearly total since 2000.

The work slowdown at west coast seaports appears to be the major force driving down hog and pork prices.

Friday morning's pork cutout value was $74.37/cwt FOB the plants, down $4.84 from the week before and down $16.80 from a year ago. Ham, belly and loin prices were all lower this week. This is the third consecutive week with a lower cutout value.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $60.33/cwt which is $5.78 lower than last week and $19.93 lower than a year ago. The western corn belt averaged $60.89 on today's morning report. Neither the eastern corn belt nor Iowa-Minnesota had a morning negotiated price quote today.

Thursday's negotiated carcass price averaged $60.91/cwt which was $5.99 lower than the week before. This morning's national average carcass price is 81.1% of the pork cutout value.

Peoria had a top live price today of $42/cwt. The top price Friday for interior Missouri live hogs was $44.50/cwt which is down $2.25 from the previous Friday.

Current hog prices are the lowest since November 2010.

Hog slaughter this week totaled 2.25 million head, down 0.2% from the week before, but up 4.1% from same week last year. Hog slaughter has been above the year ago level for four of the last five weeks.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 286.4 pounds, up 0.3 pound from the week before and up 4.8 pounds from a year ago. This was the 96th consecutive week that weights have been above the year-ago level.

Hog futures were down this week. The February lean hog futures contract closed today at $63.87/cwt, down $3.60 for the week. April hog futures ended the week at $69.27/cwt, down $2.98 from the week before. May hogs lost $2.85 this week to close at $77.60/cwt. The June contract ended the week at $81.05/cwt.

The March corn futures contract ended the week at $3.86 per bushel up 16 cents from the previous Friday. The May corn contract gained 15 cents this week to close at $3.935 per bushel. July corn settled at $4.015/bu.

Source: AGEBB