Ron Plain: Hog Outlook

Ron Plain and Scott Brown
Ag Economics, MU
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U.S. pork exports were up 9.1% in December to 428.6 million pounds with most major foreign customers buying more U.S. pork than they did in December 2014. December exports equaled 19.4% of U.S. pork production. For all of 2015, pork exports were up 1.7%.

U.S. pork imports were down a slight 0.6% in December at 101.9 million pounds. The decline was due to an 8.4% decline in pork coming south from Canada. December imports equaled 4.6% of U.S. pork production. For all of 2015, pork imports were up 10.3%.

December live hog imports totaled 529,906 head. This was up 24% compared to 12 months earlier. The U.S. exported 2,074 hogs during December. For all of 2015, the U.S. imported 5,741,056 hogs and exported 40,601. All of the hog imported in 2015 came from Canada. A majority of the hogs exported went to Mexico. Last year's U.S. hog imports were 16% more than in 2014, and the most for any year since 2011.

USDA is predicting U.S. pork exports will increase 3.7% in 2016 and imports will decrease 10% compared to this year.

As often happens at this time of year, winter weather disrupted hog movement early this week. But, packers were able to catch up on slaughter by week's end.

Hog prices are higher for the sixth consecutive week. The national negotiated barrow and gilt price on the morning report today averaged $61.06/cwt, up 80 cents from last Friday morning. There were no negotiated price quotes this morning for the eastern corn belt, western corn belt or Iowa-Minnesota.

The top price today at Peoria was $39/cwt, up $1 from last Friday. The top price for interior Missouri live hogs today was $42.75/cwt, unchanged from a week ago.

Friday morning's pork cutout value was $75.90/cwt FOB the plants. That is down 96 cents from the week before, but up $2.74 from a year ago. Loin prices were lower this week, but ham and belly prices were higher. This morning's national negotiated hog price was 80.4% of the cutout value.

This week's hog slaughter was 2.281 million head, up 4.8% from last week and up 2.5% from the same week last year.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.5 pounds, down 0.6 pound from the week before and down 2.1 pounds from a year ago. Iowa-Minnesota slaughter weights have been below the year-ago level for 45 of the last 46 weeks.

The February hog futures contract ended the week at $65.95/cwt, up $1.15 from the week before. April hogs gained 8 cents this week to close at $70.37/cwt. The June lean hog futures contract ended the week at $80.35/cwt, down 8 cents from the preceding week.

The March corn futures contracted settled at $3.5875 per bushel today. That is down 7 cents from last Friday.

Source: AGEBB