Hog Prices May Peak Early This Year
The peak in hog prices may come early this year. Hog prices usually peak in early summer. Hog slaughter has been running under the level implied by the March Hogs & Pigs report. If those smaller-than-expected marketings turn out to be delayed marketings, then summer hog slaughter may be heavier than expected and prices lower than hoped for.
USDA says there were 635 million pounds of pork in cold storage at the end of April. That is 3.5 percent more than the month before, but 9.4 percent less than a year ago. April was the third consecutive month with stocks of frozen pork below the year-ago level.
Stocks of beef in cold storage were down 6.6 percent at the end of April compared to 12 months earlier. Frozen chicken in cold storage was up 5.3 percent and turkey stocks were up 0.7 percent compared to a year earlier.
This year’s rate of planting corn has been close to average. USDA’s weekly Crop Progress report says that 86 percent of corn acres were planted by May 22. That compares to 75 percent a week earlier and 90 percent on that date last year. The five-year average is 85 percent planted by May 22.
The national negotiated barrow and gilt carcass price averaged $72.77/cwt on Thursday, down $2.27 from a week earlier and down $6.77 from a year ago.
The national negotiated barrow and gilt price averaged $71.54/cwt on the morning report today, down $2.76 from a week earlier and down $5.94 from a year ago. There was no regional negotiated price quotes this morning for the eastern corn belt, western corn belt, or Iowa-Minnesota.
The top hog price today at Peoria was $47/cwt, unchanged from last Friday. The top price for interior Missouri live hogs was $51.00/cwt, down 75 cents from a week ago.
Friday morning’s pork cutout value was $82.65/cwt FOB the slaughter plants. That is down 46 cents from the week before and down $3.43 from a year ago. This morning’s national negotiated hog price was 86.6 percent of the cutout value.
This week’s hog slaughter was 2.181 million head, up 3.2 percent from last week and up 17.1 percent from the same week last year which was light because it included the Memorial Day holiday.
The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.9 pounds, down 0.4 pound from the week before, up 2.5 pounds from the same week last year, and the ninth consecutive week heavier than a year ago.
The June lean hog futures contract ended the week at $80.525/cwt, up 67.5 cents from the preceding Friday. Today, July hogs settled at $81.075/cwt, up 82.5 cents from last Friday. The August hog contract settled at $80.725.
Corn futures keep moving higher. The July contract gained 18.25 cents this week to close the week at $4.1275 per bushel. December corn futures ended the week at $4.135/bushel, up 13.75 cents from last Friday. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri