Pork Production Is Above Year-Ago Level Past Five Weeks
The work slowdown at west coast seaports appears to be a growing drag on wholesale meat prices. Friday morning's pork cutout value was $79.21/cwt FOB the plants, down $4.50 from the week before and down $10.21 from a year ago. Ham, belly and loin prices were all lower this week.
The U.S. dollar continues to strengthen against most foreign currencies, making it harder for U.S. products to compete on world markets. Against major foreign currencies, the dollar was 14 percent more valuable in mid January than in mid July.
The U.S. economy grew at an annual rate of 2.6 percent during the fourth quarter of 2014, down from 5.0 percent growth in the third quarter. This sharp slowdown in growth was not expected given the rapid decline in energy prices during the second half of 2014. For all of 2014 the economy was 2.4 percent larger than the year before which is slightly better than the 2.2 percent growth rate in 2013.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $66.11/cwt which is $13.88 lower than a year ago. The western corn belt averaged $66.47 and Iowa-Minnesota averaged $66.45/cwt on today's morning report. The eastern corn belt had an average of $66.06/cwt this morning. The national average plant delivered carcass price for There were no morning negotiated hog prices reported a week ago. Thursday’s negotiated carcass price averaged $66.90/cwt which was $1.45 lower than the week before. Today's national average carcass price is 83.5 percent of the pork cutout value.
Peoria had a top live price today of $43/cwt. The top price Friday for interior Missouri live hogs was $46.75/cwt which is down $3 from the previous Friday.
Hog slaughter this week totaled 2.26 million head, down 2.5 percent from the week before, but up 6.2 percent from same week last year. Since December 1, hog slaughter is down a bit less than indicated by the inventory numbers in USDA's December Hogs and Pigs report.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 286.1 pounds, down 1.0 pound from the week before, but up 3.2 pounds from a year ago. This was the 95th consecutive week that weights have been above the year-ago level.
Pork production has been above the year-ago level for five consecutive weeks.
The February lean hog futures contract lost ground this week, but the deferred contracts ended the week higher than they started. The February lean hog futures contract closed today at $67.47/cwt, down $1.83 for the week. April hog futures ended the week at $72.25/cwt, up $1.60 from the week before. May hogs gained $3.68 this week to close at $80.45/cwt. The June contract ended the week at $84.10/cwt.
The March corn futures contract ended the week at $3.70 per bushel down 17 cents from the previous Friday. The May corn contract also lost 17 cents this week to close at $3.785 per bushel. July corn settled at $3.86/bu. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri