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Ron Plain: Hog Outlook

Ron Plain and Scott Brown
University of Missouri

November pork exports equaled 22.5% of U.S. pork production for the month while pork imports equaled 3.4% of production. Through November, U.S. pork exports were up 5.6% compared to the first 11 months of 2011 and pork imports were down a tiny fraction. The big growth markets for U.S. pork exports in 2012 were Mexico, Russia and Canada. U.S. pork exports were record high in 2011. When the December numbers come in, 2012 exports are expected to be 5% above the 2011 record.

The average retail price of pork in December was $3.427 per pound. That was down 5.1 cents from November and down 3.4 cents from December 2011. The average retail pork price for all of 2012 was $3.467 per pound, 3.3 cents above the 2011 record.

The average live price for 51-52% lean hogs in December was $59.16/cwt, up $1.49 from November, but down $2.98 compared to December 2011. The average live price for the year was $61.12/cwt. That is the second highest yearly average, down $5.01 from the 2011 record.

Pork packer gross margin (value of product sold minus cost of a market hog) averaged $21.59 per head in 2012. That was $7.72 under 2011’s average and $10.13 lower than in 2010, but 11 cents higher than in 2009.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $80.35/cwt, up 73 cents from last Friday. The eastern corn belt was 79 cents higher than last Friday at $79.84/cwt. Neither the western corn belt nor Iowa-Minnesota had enough early morning sales for a price quote today. Peoria had a live top of $55/cwt on Friday. Zumbrota had a top today of $56/cwt. The top for interior Missouri live hogs Friday was $58.50/cwt, up $1.50 from the previous Friday.

Thursday afternoon’s calculated pork cutout value was $83.88/cwt, up 41 cents from the previous Thursday. Loins were $2.33/cwt higher while hams, butts and belly prices were little changed. The pork cutout value is 89 cents per hundred pounds lower than a year ago. The national average hog carcass price this morning is 95.8% of the cutout value.

Hog slaughter this week totaled 2.227 million head, down 2.5% from last week and up 0.5% compared to the same week last year.

The average barrow and gilt live weight in Iowa-Minnesota last week was 276.5 pounds, up 0.2 pound from a week earlier and up 0.1 pound from a year ago. This was the first week with heavier weights since the week ending on September 22, 2012.

Friday's close for the February lean hog futures contract was $85.35/cwt, up $1.15 from the previous Friday. April hog futures ended the week 95 cents higher at $88.07/cwt. May hogs settled at $94.70/cwt; June hogs at $96.85/cwt.

Cattle futures were sharply lower this week in response to Cargill’s announcement that they were closing their Plainview, Texas slaughter plant.

Source: AGEBB

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