Hog Outlook
Ron Plain and Scott Brown
Ag Economics, Missouri University
July 15, 2016
The average retail price of pork during June was $3.77 per pound. That was 1.1 cents lower than in May, but 6.7 cents higher than in June 2015. June grocery store pork prices were the lowest since March.
The average live price for 51-52% lean hogs was $58.42/cwt in June. That is up $3.67 from the month before, up $1.17 from June 2015, and the highest monthly average hog price since December 2014.
The July WASDE report increased USDA's forecast of 2016 pork production by 0.2% but lowered their production 2017 forecast by 0.6%. They expect 2016 hog prices to average a dollar or so lower than last year and for next year to average $4 to $5 lower than this year.
Hog prices were lower this week. The national negotiated barrow and gilt carcass price averaged $73.96/cwt on Thursday, down $3.23 from a week earlier and down $1.70 from a year ago.
The national negotiated barrow and gilt price averaged $72.52/cwt on the morning report today, down $3.27 from a week earlier. The western corn belt averaged $73.15 and Iowa-Minnesota averaged a penny higher at $73.16 this morning. There was no regional negotiated price quote this morning for the eastern corn belt.
The top hog price today at Peoria was $48/cwt, down $1 from a week earlier. Today's top price for interior Missouri live hogs was $53.25/cwt, down $2.25 from last Friday.
Friday morning's pork cutout value was $90.86/cwt FOB the slaughter plants. That is up $1.41 from the week before and up $9.19 from a year ago. Loin and belly prices were higher than last Friday, hams lower. This morning's national negotiated hog price is 79.8% of the cutout value, which is unusually low for this time of year.
This week's hog slaughter totaled 2.121 million head, up 16.2% from last week (which last low because of the Independence Day holiday) but up 2.0% from the same week last year.
The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 278.3 pounds. That is up 1.6 pounds from the week before and down 1.0 pound from the same week last year.
Year-to-date, hog slaughter is down 0.1% and pork production is down 0.6%.
The July lean hog futures contract ended the week at $80.00/cwt, down 5 cents from the preceding Friday. Today, August hogs settled at $77.925/cwt, down 90 cents from last Friday. The October contract settled at $66.00, down $2.60 for the week.
USDA's Crop Progress report says that 76% of corn acres were in good to excellent conditions on July 10. That is up 1 point from the week before and 7 points higher than the same date last year. Corn futures were lower for the fourth week in a row. The September contract lost 2.75 cents this week to close the week at $3.5225 per bushel. December futures closed 4.25 cents lower than last Friday at $3.5825/bu.