Hog Outlook: Smaller Losses Expected in April

US - The red ink continues to get deeper for hog producers. Iowa State University's monthly estimate of costs and returns indicate the average Iowa hog was sold at a loss of $41.44 during March, write Ron Plain and Scott Brown.
calendar icon 29 April 2013
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This was the eighth consecutive monthly loss. ISU estimates the average breakeven price for March at $73.40/cwt of live weight. Losses will be smaller this month. The futures market implies that profitability will return in June.

The amount of pork in cold storage at the end of March was up 2.4 per cent from the month before and up 6.3 per cent from a year ago.

Pork production per sow increased 1.2 per cent in 2012, the smallest annual increase since 2008. The 5-year average is 2.3 per cent more pork per sow per year.

Corn planting is going very slow. As of 21 April, 4 per cent of corn acres were planted compared to 26 per cent a year ago and a 5-year average of 16 per cent planted by 21 April.

The International Grains Council is predicting world corn production for the 2013-14 marketing year will be up 10.3 per cent and wheat production up 3.8 per cent compared to the current marketing year.

Friday morning's pork cutout calculation based on mandatory price reporting was $87.15/cwt FOB plants, up $4.00 from the week before. Loin, ham, belly and butt prices were higher for the week.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $78.38/cwt, up $4.18 from last Friday. The eastern corn belt averaged $78.09/cwt this morning. The western corn belt averaged $80.43/cwt. Iowa-Minnesota did not have enough early day sales for a morning price report. Peoria had a top live price this morning of $53/cwt. Zumbrota, MN topped at $54.50/cwt. The top for interior Missouri live hogs Friday was $57.75/cwt, the same as the previous Friday. The average hog carcass price is 89.9 per cent of the calculated pork cutout value based on mandatory reporting.

Hog slaughter this week totaled 2.148 million head, up 0.4 per cent from the week before and up 3.0 per cent compared to the same week last year.

The average barrow and gilt live weight in Iowa-Minnesota last week was 277.1 pounds, up 0.6 pound from a week earlier and up 0.2 pounds from a year ago.

The May lean hog futures contract closed at $89.35/cwt today, up $1.50 from the previous week. June hog futures ended the week $2.32 higher at $92.52/cwt. July hogs settled at $92.75/cwt and August at $91.97/cwt.

May corn futures lost 8 cents this week to end at 6.44/bu. December corn settled at $5.24/bu.

May soybean meal futures ended the week at $417.90/ton, up $5.50 for the week. December meal settled at $337.80/ton.

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