Pork Backlog Declines As Labor Issues Subside
There were 669 million pounds of pork in cold storage at the end of March. That is the third most for any month, ever. But, it is 2.6 percent less than the month before and thus encouraging news. Earlier this year, labor issues at west coast docks had slowed exports and caused a built-up in stocks. Hopefully, the month-over-month decline in frozen pork is a sign that the backlog is being worked down.
The poultry industry is struggling to contain the spread of Avian Influenza. A number of flocks have been eliminated in the effort to control the spread. That reduces supply and boosts prices a bit. But, foreign buyers are less willing to take U.S. product which hurts demand.
The U.S. has been the world's top pork exporter for the last ten years. USDA is predicting that the E.U. will export more pork than the U.S. this year, thanks largely to a strong dollar and a weak Euro.
Seasonally, hog slaughter should trend lower and hog prices higher as we move closer to the start of summer.
This morning’s pork cutout value was $69.38/cwt FOB the plants. That is up $2.75 from the week before, but down $46.84 from a year ago. For the third week in a row, wholesale belly prices are lower than the pork cutout value.
Thursday’s negotiated carcass price for plant delivered hogs averaged $63.00/cwt which is 86 cents higher than a week earlier, but $46.24 lower than a year ago.
Because of low sales volume and confidentiality rules, there were no regional or national negotiated hog carcass price reports this morning.
Peoria had a top live price today of $41/cwt, $1 higher than last Friday. The top price today for interior Missouri live hogs was $44.50/cwt, unchanged from the previous Friday.
Hog slaughter this week totaled 2.184 million head, down 2.6 percent from the week before, but up 9.7 percent from same week last year. Year-to-date hog slaughter is up 5.5 percent and pork production is up 5.8 percent.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 283.5 pounds, down 0.3 pound from the week before and down 2.9 pounds from a year ago.
The May lean hog futures contract closed today at $71.95/cwt, up $1.43 for the week. June hog futures ended the week at $79.45/cwt, up $3.18 from the week before. July hogs gained $3.28 this week to close at $80.75/cwt. The August contract also settled at $80.75/cwt.
USDA estimates that 9 percent of corn acres had been planted by April 19. That is 3 points ahead of last year, but 4 points below the five year average.
The May corn futures contract settled at $3.645/bushel today which is 15.25 cents lower than a week earlier. September corn futures ended the week at $3.775 per bushel. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri