Hog Outlook: Hog Slaughter Expected to be Higher in 2015

US - The December hog inventory survey said the nation's swine herd was up 2.0 per cent from December 2013 with the market hog inventory up 1.8 per cent and the breeding herd up 3.7 per cent, write Ron Plain and Scott Brown of the University of Missouri.
calendar icon 29 December 2014
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These numbers were a bit larger than the average of trade expectations. The number of litters farrowed this fall was up 3.3 per cent . The survey predicted December-February farrowings will be up 3.9 per cent and spring farrowings up 3.2 per cent compared to a year ago.

Pigs per litter during September-November averaged 10.23 head, up 0.7 per cent from a year ago. This implies that death loss from the PED virus has moderated. Pigs per litter during December-May was down 5.3 per cent .

The September-November pig crop was up 4.0 per cent year-over-year and was the first quarter that the pig crop has been larger than a year ago since June-August of 2013.

The analysts write that they expect hog slaughter to be 4.6 per cent higher in 2015 than this year and carcass hog prices to average close to $84 per cwt.

All year long, there have been lots of pork bellies in cold storage. In July and August, frozen bellies were more than double a year earlier. At the end of November, frozen belly stocks were down 30 per cent year-over-year. This was the first time pork belly stocks were below year-ago since June of 2013.

The total amount of pork in cold storage at the end of November, 485.796 million pounds, was the lowest of any month since December 2011. This may not be as positive as it sounds, since low pork stocks may reflect declining export demand.

Pork cut-out value on 26 December was $87.14 per cwt FOB the plants, up 71 cents from the week before and up $3.31 from a year ago. Loins and bellies were higher this week, hams were lower.

The national average negotiated carcass price for direct delivered hogs on the morning report of 26 December was $72.96 per cwt, down $2.72 from the previous week and down $2.36 from a year ago. The western corn belt and Iowa-Minnesota both averaged $74.12 per cwt in the same morning report.

There was no negotiated carcass price reported on 26 December for the eastern Corn Belt. The average hog carcass price was only 83.7 per cent of the pork cut-out value.

Peoria had a top live price on 26 December of $50 per cwt. The top price for interior Missouri live hogs was $53.50 per cwt, $3.50 lower than the previous Friday.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota two weeks ago, 285.2 pounds, was down 0.2 pound from a week earlier but up 4.6 pounds from a year ago. That was the 90th consecutive week with weights above the year-earlier level.

The February lean hog futures contract closed on 26 December at $81.55 per cwt, down 35 cents for the week. April hog futures ended the week at $84.20 per cwt, up $1.00 from the week before. May hogs gained 53 cents this week to close at $87.70 per cwt. The June contract ended the week at $90.77/cwt.

Corn futures were higher again last week. The March contract gained four cents this week to end at $4.1475 per bushel.

Charlotte Rowney

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