Hog Outlook

Ron Plain and Scott Brown
University of Missouri
June 26, 2015

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USDA's June Hogs and Pigs report said the nation's market hog inventory is up 9.4% compared to a year ago and the breeding herd is up 1.2%. The pre-release trade forecast was for an 8.9% increase in the market inventory and a 2.1% increase in the breeding herd.

USDA said the June 1 inventory of market hogs weighing 180 pounds or more was up 13.4%, the 120-179 pound inventory was up 11.5%, the 50-119 pound inventory was up 8.7% and the inventory of market hogs weighing 50 pounds or less was up 6.6%.

USDA said March-May farrowings were up 1.4% and pigs per litter were up 6.0% yielding a spring pig crop that is 7.5% larger than March-May 2014. The report predicted summer farrowings will be down 2.5% and fall farrowings down 4.3%.

The June Cold Storage report said there were 653.6 million pounds of pork in cold storage at the end of May. That is down 6.7% from last month's record, but up 13.5% from a year ago. Frozen pork was at record levels early this year as labor troubles slowed exports from the west coast.

The latest USDA Crop Progress report estimates that 71% of the nation's corn acres were in good or excellent condition on June 21. That is down 2 percentage points from last week and down 3 points from a year ago. They said 65% of soybean acres were in good or excellent condition, down 2 points from last week and down 7 points from a year ago. Only 51% of Missouri soybean acres were plants as of June 21.

Hog prices declined for the fourth consecutive week. Thursday's negotiated carcass price for plant delivered hogs averaged $73.42/cwt which is $2.81 lower than a week earlier.

Peoria had a top live price today of $49/cwt, $1 lower than last Friday. The top price today for interior Missouri live hogs was $52.75/cwt, down $2.25 from the previous Friday.

The national average negotiated barrow and gilt purchase price on the morning report today was $72.46/cwt, down $2.59 from last Friday. The eastern corn belt averaged $72.38/cwt for negotiated purchases this morning. There was no western corn belt or Iowa-Minnesota negotiated price quote this morning.

This morning's pork cutout value was $82.35/cwt FOB the plants. That is up 17 cents from the week before, but down $49.54 from a year ago. Loins, hams and butts were lower, but belly prices higher this week. This morning's national negotiated hog price equaled 88% of the cutout value.

Hog slaughter this week totaled 2.143 million head, up 0.4% from the week before and up 12.2% from same week last year. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 279.4 pounds, down 1.5 pounds from the week before, down 5.6 pounds from a year ago, and the lightest for any week since October 2013.

The July lean hog futures contract closed today at $75.45/cwt, down 30 cents for the week. August hog futures ended the week at $72.82/cwt, down $1.00 from the week before.

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