Hog Outlook

Ron Plain and Scott Brown
University of Missouri
July 25, 2014

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Retail pork prices set a new record in June for the fourth consecutive month. The average price for pork in grocery stores in June was $4.116 per pound. That was up 1.7 cents from the month before and up 49.9 cents from a year earlier.

The average live price of 51-52% lean hogs in June was $85.35/cwt, up $3.59 from the month before, up $12.70 from June 2013, and the second highest month ever behind April 2014.

This week's USDA Cold Storage report said there were 537.7 million pounds of pork in cold storage on the last day of June. That was 6.6% less than a month earlier and 4.8% less than a year ago. The 357.8 million pounds is the lowest amount for any month since December 2011. Frozen stocks of most pork cuts were lower than last year. The big exception is bellies. Stocks of frozen pork bellies at the end of June were double the year-ago level.

Wholesale belly prices suffered a big drop after the Cold Storage report came out. This morning the average wholesale price for bellies was $145.76/cwt which is $21.78/cwt lower than last Friday. The sharp decline in pork bellies pulled down the total pork cutout value. This morning's pork cutout value was $132.87/cwt FOB the plants, down $4.69 from last Friday's record, but up $33.99 from a year ago. Wholesale ham prices set a new record of $141.64/cwt on Tuesday.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $122.64/cwt which is down $4.56 from last week, but up $30.95 from a year ago. The western corn belt averaged $123.61 this morning. Iowa-Minnesota averaged $123.48/cwt. The eastern corn belt had a morning average of $122.29/cwt. Peoria had a top live price today of $90/cwt. The top price for interior Missouri live hogs was $91.25/cwt which was the same as the previous Friday. This morning's hog carcass price equaled 92.3% of the pork cutout value.

Hog slaughter totaled 1.862 million head this week. That was up 1.6% from the week before, but down 6.4% from the same week last year.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.8 pounds. That was down 0.7 pound from the week before, but a record 13.7 pounds heavier than the same week last year. It was the 10th consecutive week with weights at least 10 pounds heavier than a year ago.

Hog futures were sharply lower this week. The August hog futures contract ended the week at $123.62/cwt, down $3.45 from the previous Friday. October hogs lost $6.28 this week to close at $107.27/cwt. The December contract ended the week at $98.15/cwt down $5.45 for the week. The February lean hog contract settled at $93.57/cwt.

This week's USDA Crop Progress report said that 76% of U.S. corn acres were in good or excellent condition on July 20. That was the same as the week before and 13 points higher than on the same date last year. The September corn futures contract closed at $3.63 per bushel today down 8 cents for the week.

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