Ron Plain and Scott Brown
Ag Economics, MU
Because New Years Day falls on Friday, this weekly summary covers only Monday-Thursday of this week.
The holidays have played havoc with weekly slaughter totals. The week before Christmas set an all-time record with 2,498,954 hogs slaughtered. The week of Christmas saw hog slaughter of only 1.701 million head, the lowest for any week since the week of Independence Day 2014. Because Christmas fell on a Friday, most packers were idle on both Friday and Saturday. Needless to say, slaughter is low this week also.
The national negotiated barrow and gilt price on the morning report today was $47.77/cwt, up 37 cents from last Thursday morning. The western corn belt averaged $48.53/cwt this morning, up 19 cents from last Thursday morning. Iowa-Minnesota averaged $48.58/cwt, down 37 cents from Friday. There was no negotiated price quote this morning for the eastern corn belt.
Today's top price in Peoria was $28/cwt. Zumbrota topped at $30/cwt. The top price Thursday for interior Missouri live hogs was $33/cwt, up 75 cents from the previous Friday.
Thursday morning's pork cutout value was $68.85/cwt FOB the plants. That is down 81 cents from a week ago. Loin, ham and belly prices were each lower this week. This morning's national negotiated hog price was only 69.4% of the cutout value.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.1 pounds, down 0.6 pound from a week earlier and down 3.8 pounds from a year ago. The Iowa-Minnesota weight series has been below the year-earlier level for 39 of the last 40 weeks. For the year, Iowa-Minnesota hogs averaged 282.0 pounds, 2.3 pounds less than last year, but still the second highest annual average.
This year's hog slaughter totaled 115.4 million head, the second highest ever after 2008. Thus year's negotiated base price for plant delivered hogs was $66/cwt, down $35 from last year's record and the lowest annual average hog price since 2009.
It appears likely that 2016 hog slaughter will be slightly higher than this year and hog prices slightly lower. USDA is forecasting 2.7% more U.S. meat production next year with pork production up 1.6%, beef production up 4.3%, chicken production up 1.8% and turkey production up 7.5% compared to this year.
The February hog futures contract ended the week at $59.80/cwt, up $1.50 from the week before. April hogs gained 88 cents this week to close at $65.95/cwt. The June lean hog futures contract ended the week at $78.00/cwt, up 40 cents from the preceding Friday.
The March corn futures contract lost 6 cents this week to close today at $3.5875 per bushel.