Ron Plain: Hog Outlook

Jan 20, 2012

Hog Outlook
Ron Plain
University of Missouri
January 20, 2012

U.S. hog prices were record high in 2011 and a big portion of the credit goes to international trade. The U.S. exported more pork in the first 11 months of 2011 than in any previous calendar year. Through November, 22.7% of U.S. pork production was exported. We exported 505 million pounds of pork during November, a record for any month. Pork exports in November were up 24.6% compared to a year earlier. The three biggest growth markets for U.S. pork exports are China (up 449 million pounds compared to January-November 2010), South Korea (up 225 million pounds) and Japan (up 183 million pounds).

U.S. pork imports during the first 11 months of 2011 were down 7.3% compared to a year earlier. Shipments from Canada were down 9.0%; 2.3% more pork came in from Denmark. Through November, pork imports equaled 3.5% of U.S. pork production.

Live hog imports during November were up 9% compared to 12 months earlier. During the first 11 months of 2011 feeder pig imports were up 2.1% and other hog imports were down 5.5%. When the totals for 2011 are in, imports of hogs and pigs are likely to be close to 5.8 million head, up less than 1% from 2010, but down 42% from the 2007 record.

Hog prices ended the week even with the previous Friday. The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.80/cwt, down 83 cents from last Friday. The morning price quote for the western corn belt was $84.40/cwt. The eastern corn belt averaged $81.08/cwt this morning. There was no morning price report for Iowa-Minnesota. Friday’s top live hog price at Peoria was $58/cwt. Zumbrota, MN had a top of $59/cwt. The top for interior Missouri live hogs was $61/cwt, up $1 from the previous Friday.

USDA’s Thursday afternoon calculated pork cutout value was $84.77/cwt, up 66 cents from the previous Thursday. Loins and bellies were higher; hams and butts were lower. The western corn belt hog price this morning was 99.6% of the pork cutout value. Packers are expected to cut back on their slaughter schedules next week in an attempt to increase their very tight margins.

Hog slaughter totaled 2.221 million head this week, up 0.4% from the week before and up 2.4% compared to the same week last year. Barrow and gilt carcass weights for the week ending January 7 averaged 207 pounds, unchanged from both the week before and from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 276.4 pounds, down 1.6 pounds from the previous week’s record, but up 1.6 pounds compared to a year earlier.

Today’s close for the February lean hog futures contract, $85.32/cwt, was down 28 cents from the previous Friday. The April lean hog futures contract settled at $87.05/cwt, unchanged for the week. May hogs settled at $95.45/cwt. June hogs ended the week at $96.52/cwt.

Ron Plain: Hog Outlook

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