Hog Outlook: 11 Successive Months of US Hog Profitability

US - October was the 11th consecutive profitable month for producers, according to Ron Plain and Scott Brown of the University of Missouri.
calendar icon 24 November 2014
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Iowa State University calculations estimated the typical market hog slaughtered in October was sold at a profit of $53.03 per head. October was the 11th consecutive profitable month for producers. The break-even price, as calculated by Lee Schulz, was $51.80/cwt live or $69.07/cwt of carcass. Because of falling corn prices, the breakeven hog price is the lowest since September 2010.

The average retail price of pork during October was $4.149 per pound. That is down 6.6 cents from the record set the month before. October pork prices were up 34 cents compared to October 2013. Boneless ham prices in grocery stores were record high in October for the second consecutive month.

The average price for 51 to 52 per cent lean hogs was $75.24 in October. That is up 88 cents from the month before and up $10.29 from a year ago.

Packer margins were squeezed a bit this week with a lower pork cut-out value and steady hog prices. Friday morning's pork cutout value was $92.88 per cwt FOB the plants, down $3.70 from the week before but up $3.30 from a year ago. Loins, hams and bellies were all lower.

The national average negotiated carcass price for direct delivered hogs on the morning report on 21 November was $84.20/cwt, up 10 cents from the previous Friday and up $7.04 from a year ago. There were no negotiated prices reported this morning for the western corn belt or Iowa-Minnesota. The eastern corn belt averaged $84.09 per cwt on the day's morning report.

Peoria had a top live price on 21 November of $62 per cwt. The top price on 21 November for interior Missouri live hogs was $60.75 per cwt, which was the same as the previous Friday.

The hog carcass price averaged 90.7 per cent of the cut-out value.

Hog slaughter this week totalled 2.232 million head, up 0.6 per cent from the week before but down 4.9 per cent compared to the same week last year. This was the 38th consecutive week with hog slaughter below the year-earlier level.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week, 284.7 pounds, was down one pound from a week earlier, but up 3.5 pounds from a year ago. This is the closest the Iowa-Minnesota weight series has been to the year-earlier level since the week of 5 October 2013.

The December lean hog futures contract closed at $90.65 per cwt, down $2.02 for the week. February hog futures ended the week at $90.45 per cwt, down $2.30 from the week before. April hogs lost 90 cents this week to close at $92.95 per cwt. The May contract ended the week at $94.80 per cwt. June closed at $98.70 per cwt.

Corn futures were lower last week. The December contract lost nine cents this week to end at $3.7275 per bushel. March corn settled at $3.8525 per bushel, also nine cents lower than the previous week. May corn futures settled at $3.9425 per bushel.

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