Ron Plain and Scott Brown
University of Missouri
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USDA's August WASDE report lowered their estimate of 2013 pork production by a slight 16 million pounds (0.068%) and raised their forecast of the annual average hog price by $1/cwt. They made no changes to their forecasts for 2014 pork production or hog price. Total red meat and poultry production is forecast to be up 0.4% this year and up an additional 0.8% in 2014.
This week USDA-FSA estimated prevented planting acres at 3.4 million. That was more than expected causing a modest rally in grain futures. The December corn futures contract ended the week at $4.635/bushel, up a dime over the previous Friday.
Crop growing conditions remain good. As of August 11, 64% of corn acres were rated in good or excellent condition. That is unchanged from the week before and up 41 percentage points from a year ago. A major concern for this year's crop is an early frost. This is especially true for soybeans.
Testing data from the National Animal Health Laboratory Network says that as of August 4, the Porcine Epidemic Diarrhea virus has been confirmed on 461 farms in 17 states. This is an increase of 27 farms and 1 state (Wisconsin) from the week before. The National Pork Board has committed $800,000 toward researching and understanding the disease.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $95.91/cwt, down 97 cents from last Friday. The eastern corn belt averaged $96.01/cwt this morning. Both the western corn belt and Iowa-Minnesota had an early morning average of $94.21/cwt. Peoria had a top live price this morning of $66/cwt. Zumbrota, MN topped out at $70/cwt. The top for interior Missouri live hogs Friday was $70.25/cwt, up 50 cents from the previous Friday.
Friday morning's pork cutout value based on mandatory price reporting was $102.91/cwt FOB plants, down $2.96 from the week before, but up $12.08 from a year ago. Loin, ham, and belly prices were all lower this week. The average hog carcass price is 93.2% of the calculated pork cutout value.
Hog slaughter this week totaled 2.177 million head, up 7.8% from the week before and up 0.05% (1,000 head) compared to the same week last year. The average barrow and gilt live weight in Iowa-Minnesota last week was 271.6 pounds, unchanged from a week earlier and up 5.6 pounds from a year ago.
The October lean hog futures contract settled at $86.72/cwt today, up $1.76 from the previous Friday. December hog futures ended the week at $83.45/cwt, up $1.40 from the week before. February hogs closed the week at $85.47/cwt.
Source: AGEBB