Govt Lowers Estimates of First Quarter Growth

by 5m Editor
4 June 2012, at 7:41am

US - Iowa State University calculations estimate the typical Iowa hog sold during April was marketed at a loss of $9.62 per head, write Ron Plain and Scott Brown.

For the first four months of 2012, the average hog was sold at a loss of $1.99. Shane Ellis’ calculations put the cost of production in April at $64.58/cwt of live weight, the highest since December and the highest ever for April.

This week’s news for the US economy was not good. On Thursday the government lowered its estimate of first quarter growth from 2.2 per cent to 1.9 per cent. Today they said the unemployment rate increased to 8.2 per cent in May from 8.1 per cent in April. The economy added only 69,000 new jobs in May, the fewest in a year.

USDA says 72 per cent of the corn crop was in good or excellent condition on 27 May. That compares to 77 per cent the week before and 63 per cent a year ago. The Crop Progress report says 89 per cent of the soybean crop was planted by 27 May compared to an average of only 61 per cent on that date. July corn futures ended the week at $5.515/bu, down 27 cents from the previous Friday. December corn settled at $5.10/bu, down 12 cents for the week.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.36/cwt, up $1.26 from last Friday. The eastern corn belt averaged $81.53/cwt this morning. Iowa-Minnesota averaged $80.46/cwt. The western corn belt had an average of $80.50 on the morning report. Both Peoria and Zumbrota had a top today of $56/cwt of live weight. The top for interior Missouri live hogs Friday was $58.50/cwt, down $2.25 from the previous Friday.

USDA’s Thursday afternoon calculated cutout value was $81.95/cwt, up $3.75 from the previous Thursday, but $6.52 lower than on this date last year. Loins, butts, bellies and hams were all higher this week. The negotiated hog carcass price this morning is 99.3 per cent of the pork cutout value.

Hog slaughter totaled 1.822 million head this week, down 11.9 per cent from the week before (due to the Memorial Day holiday on Monday), but up 4.5 per cent compared to the same week last year. Barrow and gilt carcass weights for the week ending May 19 averaged 205 pounds, down 1 pound from the week before but up two pounds from a year ago. The average barrow and gilt live weight in Iowa-Minnesota last week was 274.3 pounds, down 1.8 pounds from a week earlier, up 4.4 pounds from a year ago, and above a year earlier for the 27th consecutive week. Year-to-date, pork production is up 2.2 per cent.

Friday’s close for the June lean hog futures contract was $90.72/cwt, up $5.52 from the previous Friday. The July hog futures contract settled at $91.52/cwt, up $4.95 for the week. August ended the week at $91.30.