Hog Outlook: Margins Boosted by Higher Pork Retail Price24 February 2014
US - The average retail price of pork in grocery stores during January was $3.758 per pound. That was 0.3 cents lower than the month before, but 30.7 cents higher than a year ago, write Ron Plain and Scott Brown.
The January average live price for 51-52 per cent lean hogs was $58.36/cwt, up 20 cents from December, but down $2.86 compared to January 2013.
Last month's combination of a higher pork retail price and lower hog price boosted the margins for middlemen. The farm to wholesale price spread was 11.5 cents higher than a year ago and the wholesale to retail price margin was 23.6 cents higher. Seasonally, middlemen's margins should shrink and hog prices rally as we move toward summer.
There were 623.7 million pounds of pork in cold storage at the end of January. That was up 12.5 per cent from December and up 2.9 per cent from a year ago. Given the large price premium of summer futures over current cash hog prices, there is an expectation that stocks of frozen pork will increase.
The number of new cases of PED virus continues to climb. As of 9 February, the total number of infected swine farms was 3,310. (There is an uncertain amount of double counting in this data.) Each of the last five weeks more than 200 new farms were confirmed with the disease. The last three weeks added 840 farms to the count. Three states, Iowa, Minnesota and North Carolina account for 62.6 per cent of the cases.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $88.37/cwt, up $5.83 from last Friday and up $12.59 from a year ago. The eastern corn belt averaged $88.20/cwt this morning.
The western corn belt had a morning average of $89.53. Iowa-Minnesota did not have a price quote this morning. Peoria had a top live price this morning of $60/cwt. Zumbrota, MN did not have sales today because of harsh weather.
The top price Friday for interior Missouri live hogs was $63.00, up $4.50 from the previous Friday.
Friday morning's pork cutout value was $97.38/cwt FOB the plants, up $3.66 from the week before and up $15.60 from a year ago. This morning's hog carcass price averaged 90.7 per cent of the cutout value.
Hog slaughter this week totaled 2.234 million head, up 1.0 per cent from the week before and up 3.1 per cent compared to the same week last year.
The average live weight of barrows and gilts in Iowa-Minnesota last week was 281.2 pounds, up 0.2 pound from a week earlier and up 5.9 pounds from a year ago.
The April lean hog futures contract settled at $99.35/cwt today, up $3.18 from the previous Friday. May hog futures ended the week at $107.00/cwt, up $2.95 from the week before. June hogs gained $1.90 to close at $108.02. The July contract ended the week at $107.55/cwt. August closed at $105.97/cwt.
March corn futures ended the week at $4.53/bushel, up 8 cents higher from the week before.
ThePigSite News Desk