Low Job Creation Adds To Meat Producers Worries
There doesn’t appear to be any big changes occurring in the size of the swine breeding herd. Year-to-date sow slaughter is up a fraction more than is total hog slaughter. Based on our gilt slaughter data, year-to-date gilt slaughter is up a small amount more than barrow slaughter.
The U.S. economy added only 38,000 jobs during May. That was 126,000 fewer jobs than the average of economists' forecasts and the fewest for any month since September 2010. The number of jobs created in March and April were revised lowered by 59,000. Since meat demand usually tracks with the economy, this is worrisome news for summer meat demand. The odds the Federal Reserve Bank will raise interest rates this month are near zero.
This year’s rate of corn planting has been close to average. USDA's weekly Crop Progress report says that 94 percent of corn acres were planted by May 29. That compares to 86 percent a week earlier and 94 percent on that date last year. The five-year average is 92 percent planted by May 29.
The national negotiated barrow and gilt carcass price averaged $74.83/cwt on Thursday, up $2.06 from a week earlier, but down $3.77 from a year ago.
The national negotiated barrow and gilt price averaged $73.15/cwt on the morning report today, up $1.61 from a week earlier, but down $5.28 from a year ago. There were 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 $46/cwt, down $1 from last Friday. The top price for interior Missouri live hogs was $51.00/cwt, unchanged from a week ago.
Friday morning’s pork cutout value was $85.60/cwt FOB the slaughter plants. That is up $2.95 from the week before and up 19 cents from a year ago. Loin, ham and belly prices were all higher than last Friday. This morning’s national negotiated hog price was 85.5 percent of the cutout value.
This week’s hog slaughter was 1.899 million head, down 12.9 percent from last week and down 10.4 percent from the same week last year. This week’s slaughter was light because it started with the Memorial Day holiday.
The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.2 pounds. That is down 0.7 pound from the week before and also down 0.7 pound from the same week last year.
Hog futures had a very good week. The June lean hog futures contract ended the week at $82.30/cwt, up $1.775 from the preceding Friday. Today, July hogs settled at $85.975/cwt, up $4.90 from last Friday. The August hog contract settled at $85.875, up $5.15 for the week.
Corn futures keep moving higher. The July contract gained 5.5 cents this week to close the week at $4.1825 per bushel. December corn futures ended the week at $4.1975/bushel, up 6.25 cents from last Friday. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri