Ron Plain and Scott Brown
Ag Economics, MU
September 30, 2016
===========================
USDA's September survey of the U.S. swine herd says the market hog inventory is up 2.6% and the breeding herd is up 0.5% compared to September 1, 2015. USDA said summer farrowings were up 0.2%. The survey indicated fall farrowings would be down 0.03% and winter farrowings down 0.06%.
A major concern for the industry is whether there will be adequate slaughter capacity this fall. The Hogs and Pigs report said that the inventory of market hogs by weight group was: 180+ pounds up 4.1%; 120-179# up 3.7%, 50-119# up 1.9% and under 50 pounds up 1.7%.
The average of pre-release trade predictions was for the breeding herd to be up 0.6% and the market hog inventory to be up 1.1%.
There were 607 million pounds of pork in cold storage at the end of August. That is 1.4% more than the month before, but 7.1% less than a year ago. Stocks of beef in cold storage were up 1.3% year-over-year, but frozen chicken stocks were down 0.7% to the lowest level since July 2015.
Last week's hog slaughter, 2.466 million head was the third largest ever. This week's hog slaughter totaled 2.436 million head. That is the fourth largest weekly slaughter ever. This week's total is down 1.2% from last week, but up 7.4% from the same week last year.
Slaughter hog prices were roughly $2 lower this week as hog slaughter continues to run at record high levels for this time of year. The national negotiated barrow and gilt price averaged $47.87/cwt on the morning report today, down $2.07 from a week earlier and down $21.96 from a year ago. The western corn belt averaged $48.13/cwt this morning, down $1.23 from last Friday. Iowa-Minnesota also averaged $48.13 this morning. There was no regional price quote this morning for the eastern corn belt.
The top hog price today at Peoria was $29/cwt, down $3 from a week ago. Today's top price for interior Missouri live hogs was $34.50/cwt, down $2.25 from last Friday.
Friday morning's pork cutout value was $73.47/cwt FOB slaughter plants. That is down $3.80 from the week before. Loin, ham and butt prices were lower; belly prices were a bit higher. This morning's national negotiated hog price is only 65.2% of the cutout value.
The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.0 pounds. That is down 1.6 pounds from the week before, but up 0.3 pounds from the same week last year. This was the second week that weights were above the year-ago level since the week ending July 16.
Hog futures were sharply lower this week. The October lean hog futures contract ended the week at $49.025/cwt, down $4.975 from the preceding Friday. Today, December hogs settled at $43.975/cwt, down $4.925 from last Friday. The February contract settled at $48.90, down $4.45 for the week. June hogs settled at $67.075 today.
Source: AGEBB