Breeding Herd Rises, Pork Prices Fall
USDA says the breeding herd was up 2.2 percent on March 1 and the market hog inventory was up 7.7 percent compared to last year.
The average price of pork at retail was $3.941 per pound during February. That is down 4.8 cents from the month before and down 21.4 cents from a year earlier. Pork prices in grocery stores have declined for five consecutive months.
The average live price for 51-52 percent lean hogs was $45.75/cwt during February. That was down $8.30 from January and down $18.13 from a year ago.
The rapid decline in live hog prices relative to retail pork prices has left middlemen with very good margins. The wholesale-retail pork price spread was a record $2.542 per pound in February. That was the fourth consecutive monthly record.
There were 686 million pounds of pork in cold storage at the end of February. That was 15 percent more than the month before and 5 percent more than a year ago. This is the most frozen pork in storage since April 30, 2013. The large stocks are likely due in part to the slowdown in west coast exports earlier this year.
Both hog and pork prices are sharply lower than at this time last year. Friday morning’s pork cutout value was $66.08/cwt FOB the plants. That is down $1.44 from the week before and down $64.85 from a year ago. This is the tenth consecutive week with a lower cutout value. Wholesale ham prices and belly prices are both down 64 percent compared to a year ago.
Thursday’s negotiated carcass price for plant delivered hogs averaged $55.96/cwt which is $1.93 lower than a week earlier and $69.20 lower than a year ago.
The national average negotiated barrow and gilt carcass price on morning sales today was $54.83/cwt. The eastern corn belt also averaged $54.83 this morning. This morning’s price is 83 percent of the pork cutout value. Because of low sales volume and confidentiality rules, there were no western corn belt or Iowa-Minnesota negotiated hog carcass price reports this morning.
Peoria had a top live price today of $35/cwt, $2 lower than seven days ago. The top price Friday for interior Missouri live hogs was $40.75/cwt which is down $1.50 from the previous Friday.
Hog slaughter this week totaled 2.27 million head, up 1.5 percent from the week before and up 11.8 percent from same week last year. Hog slaughter has been above the year ago level for the last ten weeks.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.2 pounds, up 0.2 pound from the week before and up 0.3 pounds from a year ago. This was the 103rd consecutive week with Iowa slaughter weights above the year-ago level.
Hog futures were mostly higher this week. The April lean hog futures contract closed today at $61.10/cwt, up $2.65 for the week. May hog futures ended the week at $68.20/cwt, down 7 cents from the week before. June hogs gained $1.10 this week to close at $74.95/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri