Ron Plain and Scott Brown
Ag Economics, MU
November 6, 2015
U.S. pork exports were up 17.8% in September compared to a year earlier with large increases in exports to Japan, China, Mexico and Australia. September was second consecutive month with exports higher than last year.
U.S. pork imports were down 2.8% during September with less pork being imported from Canada, Poland and Denmark than in September 2014.
Pork exports equaled 19.8% of September production and pork imports equaled 4.5% of production. During the first 9 months of 2015, pork imports were up 14.5% and pork exports were down 1.2%.
Hog imports were up 9.3% in September.
The Bureau of Labor Statistics said 271,000 jobs were added last month, the average hourly earnings increased by 9 cents, and the October unemployment rate declined to 5.0%. This is good news for domestic meat demand.
It was another bad week for hog prices. The average negotiated price for barrows and gilts purchased on Thursday for slaughter plant delivery was $54.47/cwt, down $8.63 from a week earlier and down $14.79 from two weeks ago.
The national average negotiated carcass price on the morning report today was $53.36/cwt, down $7.32 from a week earlier. The western corn belt also averaged $53.36/cwt and Iowa-Minnesota averaged $53.57/cwt for negotiated purchases this morning. There was no morning price quote for the eastern corn belt today.
Peoria had a top live price today of $36/cwt, down $6 from last Friday. The top price today for interior Missouri live hogs was $38.50/cwt, down $8.25 from the previous Friday.
This morning's pork cutout value was $76.07/cwt FOB the plants. That is down $4.54 from the week before. Wholesale belly prices were down $19.61/cwt from last week and down $45.13 from two weeks ago. Despite this sharp decline, belly prices are still above the year-ago level.
Hog prices continue to be weak compared to the cutout value, in part because the value of byproducts is down 35-40%. This morning's national average hog carcass price was only 70.1% of the pork cutout value.
This week's hog slaughter totaled 2.36 million head, up 4.7% from last week and up 6.0% from the same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.7 pounds, up 0.5 pound from a week earlier, but down 2.5 pounds from a year ago. This was the 32nd consecutive week with weights lighter than last year.
Hog futures were lower this week. The December lean hog futures contract settled today at $55.00/cwt, down $4.20 for the week. February hog futures ended the week at $58.30/cwt, down $4.45 from the week before. April hogs lost $3.58 this week to close at $63.85/cwt.
The December corn futures contracted settled at $3.73 per bushel today. That is down 9 cents from last Friday.