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March Hog Report More Bearish
USDA’s March Hogs and Pigs report said the nation's swine breeding herd inventory was up 0.3 percent compared to a year ago and the inventory of market hogs was down 3.7 percent compared to March 1, 2013. This was more bearish than the average of pre-release trade predictions.
Cash hog prices this week were higher for the tenth consecutive week and also set new all-time records. The national average negotiated carcass price for direct delivered hogs on the morning report today was $125.16/cwt, up $2.56 from last Friday, up $42.62 from six weeks ago, and up $49.40 from a year ago. The eastern corn belt reported a morning average of $124.64/cwt. Neither Iowa-Minnesota nor the western corn belt had a price quote this morning. Peoria had a top live price today of $85/cwt. Zumbrota, MN topped at $87/cwt. The top price Friday for interior Missouri live hogs was $89/cwt, up $3.00 from the previous Friday.
Wholesale pork belly prices this morning were a record $195.41/cwt. Friday morning’s pork cutout value was $130.93/cwt FOB the plants, down 11 cents from the week before, but up $53.72 from a year ago. This morning’s hog carcass price averaged 95.6 percent of the cutout value. Tight margins and low hog numbers have caused packers to reduce their operating hours.
At the end of February, there were 653.8 million pounds of pork in cold storage. That was up 5.7 percent from the month before, up 3.2 percent compared to a year ago, and the most frozen pork since the end of May. Given the expectation of record high pork prices this summer, putting extra pork in freezers may be a wise move.
The number of new cases of PED virus continues to climb. Each of the 8 weeks prior to mid March increased the number of farms with the disease by more than 250. There are now more than 5,000 hog farms with the PED virus.
Hog slaughter this week totaled 2.033 million head, down 0.4 percent from the week before and down 7.0 percent compared to the same week last year.
The average live weight of barrows and gilts in Iowa-Minnesota last week was a new record 283.9 pounds. That is up 0.9 pound from a week earlier, up 8.2 pounds from a year ago, and up 0.2 pound from the old record set the week ending on January 18, 2014. Year-to-date hog slaughter is down 4.0 percent while, because of heavier hog weights, pork production is down only 1.2 percent.
Hog futures ended the week with little change even though they were down the $3 limit on Tuesday and up the $3 limit on Thursday. The April lean hog futures contract settled at $125.57/cwt today, down 10 from the previous Friday. May hog futures ended the week at $125.20/cwt, down $1.07 from the week before. June hogs lost 75 cents this week to close at $129.57/cwt. The July contract ended the week at $126.20/cwt, down 40 cents for the week. August closed at $125.97/cwt.∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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