Hog Prices Head Steadily Higher In January
An increase in the meat supply combined with poor export demand and weak domestic demand has caused meat prices to head lower. Consumers have frequently paid record prices for meat in the last few years. They are going to get a better deal in 2016. For livestock producers this will mean low animal prices.
The average price of a pound of pork at retail during December was $3.846. That was down 7.1 cents from the month before, down 14.5 cents from a year ago, and the lowest for any month since August.
Seasonally, December hog prices are often the lowest of the year. The average live price for 51-52% lean slaughter hogs was $39.30/cwt during December. That was down $2.71 from the month before and down $21.94 from a year ago. This is the lowest monthly average market hog price since October 2009.
Thus far in January, hog prices are headed steadily higher. The national negotiated barrow and gilt price on the morning report today was $54.70/cwt, up $3.91 from last Friday morning. There were no negotiated price quotes this morning for the eastern corn belt, the western corn belt or for Iowa-Minnesota.
The top price today at Peoria was $34/cwt, unchanged from last Friday. The top price for interior Missouri live hogs today was $36.50/cwt, up $1.50 from a week ago.
Friday morning's pork cutout value was $74.53/cwt FOB the plants. That is up $2.84 from the week before, but down $9.18 from a year ago. Loin, ham and belly prices were each higher this week. This morning's national negotiated hog price was 73.4 percent of the cutout value.
This week’s hog slaughter was 2.329 million head, up 1.3 percent from last week and up 0.5 percent from the same week last year. As we move toward summer, hog slaughter should trend lower and hog prices higher.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 285.3 pounds, down 1 pound from the week before and down 1.8 pounds from a year ago. Iowa-Minnesota slaughter weights have been below the year-ago level for 42 of the last 43 weeks.
The February hog futures contract ended the week at $63.00/cwt, up 98 cents from the week before. April hogs gained $1.55 this week to close at $69.00/cwt. The June lean hog futures contract ended the week at $78.95/cwt, up 58 cents from the preceding week.
The March corn futures contracted settled at $3.7025 per bushel today. That is up 7 cents from last Friday. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri