Ron Plain and Scott Brown
University of Missouri
Hog Outlook
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Retail pork prices peaked in September and have declined each month since. But the rate of decline has been slower than the drop in hog prices causing retailers margins to widen.
The average price of a pound of pork at retail was $3.893 during March. That was 4.8 cents lower than the month before, but 6.3 cents higher than a year ago. The average live price of 51-52% lean hogs in March, $45.61/cwt, was down 14 cents from the month before and down $38.21 from a year ago. The sharp drop in hog prices has left the wholesale-retail pork spread at a record $2.563 per pound. A tighter price spread should boost pork movement.
Beef prices are very high compared to pork. In March, the average retail price of ground beef ($4.20 per pound) was slightly higher than the average price of boneless pork chops ($4.196 per pound). Over the last four years, high bacon prices have boosted retail pork prices but that is changing. March bacon prices were the lowest since June 2013.
This morning's pork cutout value was $66.63/cwt FOB the plants. That is up 91 cents from the week before, but down $55.67 from a year ago. For the second week in a row, wholesale belly prices are lower than the pork cutout value.
Thursday's negotiated carcass price for plant delivered hogs averaged $62.14/cwt which is $4.10 higher than a week earlier, but $48.95 lower than a year ago.
The national average negotiated barrow and gilt carcass price on morning sales today was $61.19/cwt, up $2.45 from last Friday. This morning's price is 91.8% of the pork cutout value. The western corn belt averaged $61.37/cwt this morning. Because of low sales volume and confidentiality rules, there were no eastern corn belt or Iowa-Minnesota negotiated hog carcass price reports this morning.
Peoria had a top live price today of $40/cwt, $2 higher than last Friday. The top price today for interior Missouri live hogs was $44.50/cwt, up $4.50 from the previous Friday.
Hog slaughter this week totaled 2.243 million head, up 3.3% from the week before and up 12.0% from same week last year. Year-to-date hog slaughter is up 5.2% and pork production is up 5.6%.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.8 pounds, up 0.3 pound from the week before, but down 1.9 pounds from a year ago.
The May lean hog futures contract closed today at $70.52/cwt, down $1.25 for the week. June hog futures ended the week at $76.27/cwt, down $1.88 from the week before. July hogs also lost $1.88 this week to close at $77.47/cwt. The August contract settled at $77.50/cwt.
The May corn futures contract settled at $3.7975/bushel which is 3 cents lower than a week earlier. September corn futures ended the week at $3.94 per bushel.
Source: AGEBB