US Hog Margins, 16 July 2012
US - Margins plummeted over the past two weeks, continuing the downward move from mid-June, as feed prices have soared and hog prices have slumped, writes Doug Lenhart, General Manager of Genesus USA.
19 July 2012
3 minute read
All margins are deeply negative now with the exception of 2Q 2013. The extreme weather conditions have extended into the first part of July, as a continuation of high temperatures and a lack of rainfall continues.
| Genesus Global Market Report Prices for the week of July 16, 2012 |
||
|---|---|---|
| Country | Domestic price (own currency) |
US dollars (Liveweight a lb) |
| USA (Iowa-Minnesota) | 94.70¢ USD/lb carcass | 70.07¢ |
| Canada (Ontario) | 1.83¢ CAD/kg carcass | 65.82¢ |
| Mexico (DF) | 20.55 MXN/kg liveweight | 77.30¢ |
| Brazil (South Region) | 1.78 BRL/kg liveweight | 39.74¢ |
| Russia | 95 RUB/kg liveweight | $1.32 |
| China | 13.36 RMB/kg liveweight | 95.09¢ |
| Spain | 1.38 EUR/kg liveweight | 76.58¢ |
Crop conditions have now dropped sharply to near-record low levels putting upward pressure on prices as memories of the 1988 drought continue to worry the marketplace. As a result of the poor growing conditions, USDA lowered its yield forecast for the domestic corn crop to 146 bushels per acre, down 20 bushels per acre from the June estimate. Likewise, soybean yields were reduced to 40.5 bushels per acre from 43.9 in June. Interestingly, USDA lowered feed demand for corn by a large 650 million bushels, and also lowered domestic soybean meal usage, citing that higher prices would discourage demand.
The weather remains front-and-center and a soaking rain is needed to stabilize the already damaged corn crop. Hog prices had enjoyed a good recovery in late June only to have given the gains back over the last few days. A combination of lower weights and smaller runs has helped keep prices from falling much further.
3rd Qtr ’12 Most Recent Offering of $(7.08), the low was $(7.08), the high has been $14.07 and the 5 year percentile of 10.9 per cent.
4th Qtr ’12 Most Recent Offering of ($14.53), the low was ($14.53), the high has been $7.19 and the 5 year percentile of 5.7 per cent.
1st Qtr ’13 Most Recent Offering of ($8.37), the low was ($8.37), the high has been $6.04 and the 5 year percentile of 8.6 per cent.
2nd Qtr ’13 Most Recent Offering of $1.67, the low was $1.55, the high has been $9.83 and the 5 year percentile of 20.8 per cent.
