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Weekly Review: 2009: 2nd-Best Year for Pork Exports

by 5m Editor
18 January 2010, at 2:13pm

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

The big news this week was USDA's January 12 crop report. USDA increased their estimate of corn acres planted in 2009 by 100,000, raised harvested acres by 300,000 and increased average yield by 2.3 bushels per acre (bu/acre). The result was a record yield of 165.2 bu/acre and the largest corn crop ever at 13.151 billion bushels. USDA reduced their estimate of harvested soybean acreage in 2009 by 200,000 acres but increased their estimate of per acre yield by 0.7 bushel to a record 44.0 bu/acre. Total soybean production in 2009 was a record 3.361 billion bushels. All corn futures contracts through September 2011 closed down the 30 cent limit on Tuesday. The March corn futures contract ended the week at $3.715/bu, 51 cents lower than it started. March soybeans ended the week at $9.74, 48 cents lower than the previous Friday. If corn averages $3.75/bushel in 2010, the break-even price for hogs should be close to $52/cwt live.

Pork exports during November totalled 383.2 million pounds, 11.3 per cent more than 12 months earlier and the largest monthly total since October 2008. Although 2009 pork exports were down compared to 2008, last year was easily the second best year ever for US pork exports. US pork exports in 2010 are expected to be back close to the 2008 record.

Last week's cold and snow left us expecting a big hog kill this week and lower prices. That did not happen. Hog prices moved higher. This week's hog slaughter is estimated to be 2.176 million head, down 5.8 per cent compared to the same week in 2009.

USDA's Thursday afternoon calculated pork cut-out value was $73.05/cwt, up $2.73 from the previous Thursday. Hams, loins, bellies and Boston Butts were all higher. At this time last year, the pork cut-out was $56.26/cwt.

The top price Friday at Sioux Falls was $44/cwt. Peoria had a top of $41/cwt and Zumbrota, MN topped at $40. The interior Missouri top Friday was $46/cwt, unchanged for the week. The plant delivered price took a big jump at the end of the week with the national weighted average carcass price Friday morning for negotiated hogs at $67.63/cwt, $3.26 higher than the previous Friday and $11.87/cwt higher than a year ago. Regional average prices on Friday morning were: eastern corn belt $66.31, western corn belt $69.60, and Iowa-Minnesota $69.88/cwt.

Hog prices on 15 January are roughly break-even for the average producer. There have only been a few brief periods in the last nine quarters when hogs were sold at a profit. For hog prices to reach this level in January is truly an encouraging sign.

The average carcass weight of barrows and gilts slaughtered the week ending 2 January was 200 pounds, two pounds lighter than for the same week last year. Iowa-Minnesota live weights last week averaged 269 pounds, down 1.6 pounds compared to last year.

The February lean hog futures contract ended the week at $69.97/cwt, up $2.72 from last Friday. The April contract settled at $73.27 today, up $1.85 for the week. May closed the week at $76.97/cwt and June closed at $80.85/cwt.