Hog Outlook

Ron Plain and Scott Brown
Ag Economics, MU
April 29, 2016

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U.S. cash receipts from hog sales totaled $21 billion dollars last year. That was down $5.5 billion from the 2014 record. According to USDA's annual publication, Meat Animals Production, Distribution, and Income, five states had more than a billion dollars in hog sales in 2015: Iowa, Minnesota, North Carolina, Illinois and Indiana. At $7.5 billion, Iowa had nearly three times the cash receipts as number two Minnesota. Missouri ranked sixth at $939 million in cash receipts from hog sales.

There were 614 million pounds of pork in cold storage at the end of March. That was 2.4% less than the month before and 8.7% less than a year earlier. The amount of beef in cold storage at the end of March was down 3% year-over-year, but frozen chicken stocks were up 4.6%.

Corn planting is well ahead of normal. USDA's weekly Crop Progress report says that 30% of corn acres were planted by April 24. That compares to 13% a week earlier and 16% on that date last year. The five-year average is 16% planted by April 24.

Cash hog prices were higher this week. The national negotiated barrow and gilt carcass price averaged $68.42/cwt on Thursday, up $3.10 from a week earlier, but down $4.54 from a year ago. The May futures price is well above the cash price, so look for higher cash prices in the week ahead.

The national negotiated barrow and gilt price averaged $69.23/cwt on the morning report today, up $5.45 from a week earlier. Both the western corn belt and Iowa-Minnesota averaged $70.68/cwt this morning. There was no negotiated price quote this morning for the eastern corn belt.

The top hog price today at Peoria was $42/cwt, up $2 from last Friday. The top price for interior Missouri live hogs was $47.25/cwt, up $3.00 from a week ago.

Friday morning's pork cutout value was $81.77/cwt FOB the plants. That is up $3.10 from the week before and up $7.85 from a year ago. Loin and ham prices were higher this week; but bellies were lower.

This morning's national negotiated hog price was 84.7% of the cutout value.

This week's hog slaughter was 2.139 million head, down 4.6% from last week and down 0.6% from the same week last year.

The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.0 pounds, down 0.1 pound from the week before, but up 2.2 pound from a year ago. That is the biggest year-over-year increase in slaughter weight since February 2015.

The May hog futures contract gained $2.20 this week to close at $77.90/cwt. The June lean hog futures contract ended the week at $81.70/cwt, up $2.875 from the preceding Friday. Today, July hogs settled at $81.775/cwt, up $2.30 compared to the previous Friday.

The May corn futures contract settled at $3.9025 per bushel today. That is up 18.5 cents from last week. July corn ended the week at $3.9175/bu., up 16.25 cents from last Friday.

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