Hog Outlook

Ron Plain and Scott Brown
Ag Economics, MU
December 30, 2016

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This is the final Hog Outlook article. For over 1500 weeks this summary of the week's hog market has been published on AgEBB at the University of Missouri. The articles were first written by Glenn Grimes then by Ron Plain and Scott Brown. Ron is retiring, but Scott Brown will continue to do a weekly video update on cattle and hog markets that you can find at: https://brownfieldagnews.com/brownfield-livestock-market-updates/

There were 520 million pounds of pork in cold storage at the end of November. That is 13.1% less than the month before and 7.2% less than a year ago. Compared to November 30, 2015, frozen stocks of beef were up 4.1%, chicken stocks down 10.3%, and frozen turkey up 25.4%.

Calculations by Lee Schulz at Iowa State University put the average loss for Iowa hogs marketed in November at $35.52/head. That is the third month in a row with red ink, and the biggest monthly loss since March 2013. Dr. Schulz estimated the cost of production for November marketings at $44.70/cwt (live) or $59.59/cwt of carcass.

The Peoria stockyards had their final hog sale on December 23. Peoria was the last of the 8 historic terminal hog markets to close. The other seven were Chicago, St Louis, Kansas City, St Joseph, Sioux City, St Paul and Indianapolis.

Record hog slaughter and limited slaughter capacity had a big impact on 2016 hog prices. Preliminary data indicate pork cutout value was down 0.5% this year, but producer hog prices were 7% lower.

The national negotiated barrow and gilt carcass price averaged $51.32/cwt on the morning report today, down 45 cents from a week earlier, but up $3.55 from a year ago. The western corn belt averaged $51.18/cwt this morning, up $1.78 from a week ago. Neither the eastern corn belt nor Iowa-Minnesota had a morning price quote today.

Today's top price for interior Missouri live hogs was $36.00/cwt, unchanged from last week. The Illinois direct hog market peaked at $37.00/cwt today.

Friday morning's pork cutout value was $80.98/cwt FOB the slaughter plants. That is up 39 cents from the week before and up $12.13 from a year ago. This morning's national negotiated hog carcass price is 63.4% of the cutout value.

This week's hog slaughter totaled 2.081 million head, down 3.2% from last week, but up 2.1% from the same week last year.

The average slaughter weight of barrows and gilts in Iowa-Minnesota-South Dakota last week was 279.2 pounds. That is down 0.6 pound from the week before and down 3.9 pounds from the same week last year. This was the 6th consecutive week with hog weights more than 3 pounds below the year-ago level.

The February lean hog futures contract ended the week at $66.15/cwt, up $2.95 from the preceding Friday. April hogs settled at $68.075/cwt, up $2.20 from last Friday. The May contract settled at $72.90, up $1.70 for the week. June hogs settled at $76.50/cwt today.

Corn futures ended the week 3-4 cents higher than last Friday. The March corn futures contract settled at $3.4975 per bushel up 4 cents for the week. May corn futures closed at $3.5575/bu, up 3.25 cents from last Friday. July corn futures ended the week 3 cents higher at $3.63 per bushel. September corn settled at $3.7025/bushel.

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