Ron Plain and Scott Brown
Ag Economics, MU
October 28, 2016
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In last week's article I carelessly confused price per pound and price per hundredweight on retail pork. I should have said: The average retail price of pork during September was $3.789 per pound. That was down 0.9 cents per pound from the month before and down 13.0 cents per pound from a year ago.
Pork in cold storage totaled 642 million pounds on September 30. That is up 5.4% from the last day of August, but down 2.1% from a year ago.
There were 520.7 million pounds of beef in cold storage at the end of September. This was up 9.3% from the month before, up 4.5% from a year ago, and the most frozen beef for any month since January 2003. The amount of chicken in cold storage was up 3.3% compared to September 30, 2015. Frozen turkey stocks were up 13.7% year-over-year.
This week's hog slaughter totaled 2.401 million head, down 4.5% from last week (which was the largest ever), but up 6.5% from the same week last year. The Smithfield plant in Tar Heel, North Carolina was idle part of the week as it continues to deal with water problems caused by Hurricane Matthew.
Hog slaughter is running 1-2% above the level implied by the September market hog inventory.
Friday morning's pork cutout value was $74.00/cwt FOB slaughter plants. That is down 2 cents from the week before and down $6.61 from a year ago. This week ham and butt prices were higher; belly and loin prices were higher.
The national negotiated barrow and gilt carcass price averaged $44.09/cwt on the morning report today, down 49 cents from a week earlier. The western corn belt averaged $44.51/cwt this morning, down 89 cents from last Friday. The eastern corn belt averaged $43.98/cwt. Iowa-Minnesota averaged $44.43/cwt. This morning's national negotiated hog carcass price is only 59.6% of the cutout value.
The top hog price today at Peoria was $25/cwt, unchanged from a week ago. Today's top price for interior Missouri live hogs was $29.25/cwt, also unchanged from last Friday.
The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 281.8 pounds. That is up 0.4 pound from the week before, but down 0.4 pound from the same week last year.
Hog futures were sharply higher this week. The December lean hog futures contract ended the week at $46.80/cwt, up $4.95 from the preceding Friday. February hogs settled at $54.00/cwt, up $5.275 from last Friday. The April contract settled at $61.65, up $4.925 for the week. June hogs settled at $73.45 today.
Corn futures were a bit higher this week. The December corn futures contract gained 2.5 cents this week to close at $3.55 per bushel. March corn futures closed 1 cent higher than last Friday at $3.6325/bu. May corn futures ended the week at $3.7025/bu. July corn settled at $3.7675/bushel.
Source: AGEBB