Ron Plain and Scott Brown
University of Missouri
March 7, 2014
Hog futures continue to set new records highs daily. The April lean hog futures contract settled at $113.00/cwt today, up $6.15 from the previous Friday. May hog futures ended the week at $117.75/cwt, up $6.35 from the week before. June hogs gained $8.28 to close at $120.50. The July contract ended the week at $118.55/cwt, up $7.10 for the week. August closed at $116.77/cwt. Prior to February 2014, no hog futures contract had ever closed above $108/cwt.
It also has been another fabulous week for hog prices. The national average negotiated carcass price for direct delivered hogs on the morning report today was $102.88/cwt, up $4.85 from last Friday, up $20.34 from three weeks ago, and up $28.65 from a year ago. The eastern corn belt reported a morning average of $103.08/cwt. Neither Iowa-Minnesota nor the western corn belt had a price quote this morning. Peoria had a top live price today of $68/cwt. Zumbrota, MN topped at $74/cwt. The top price Friday for interior Missouri live hogs was $72.75, up $6.00 from the previous Friday.
Friday morning's pork cutout value was $111.09/cwt FOB the plants, up $6.42 from the week before and up $32.18 from a year ago. This morning's hog carcass price averaged 92.6% of the cutout value.
The number of new cases of PED virus continues to climb. Each of the last 5 weeks increased the number of farms with the disease by more than 250. As of February 23, the total number of infected swine farms was 4,106. (There is an uncertain amount of double counting in this data.)
Statistics Canada reported the January 1 inventory of hogs and pigs in Canada was up 1.1% from a year ago. Their breeding herd inventory up 0.3% and their inventory of market hogs was up 1.1%. The Canadian swine herd is roughly one-fifth the size of the U.S. herd.
The Bureau of Labor Statistics says non-farm payroll increased by 175,000 jobs in February. That is a good sign for the economy and for meat demand.
Hog slaughter this week totaled 2.052 million head, down 4.8% from the week before and down 6.6% compared to the same week last year. This is the first week with pork production below the year-ago level since the week ending January 11.
The average live weight of barrows and gilts in Iowa-Minnesota last week was 281.8 pounds, down 0.4 pound from a week earlier, but up 5.7 pounds from a year ago.
Corn futures rallied this week to bring the nearby contract to the highest price since September. March corn futures ended the week at $4.81/bushel, up 23 cents from the week before. May corn settled at $4.89/bushel. The July corn futures contract ended the week at $4.93/bushel.
March soybean meal ended the week at $465/ton, down $2.90 for the week. May meal futures closed at $457.80/ton.
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