Hog Outlook: Down Week for US Hog Market
US - The US economy grew only 1.5 per cent during the third quarter. That is far less than what is needed for robust meat demand. The World Health Organization released a report linking processed meats to an increase in the risk of getting cancer. That isn't good for meat demand either, write Ron Plain and Scott Brown, Ag Economics, MU.
It was a down week in the hog market. The average negotiated price for barrows and gilts purchased on Thursday for slaughter plant delivery was $63.10/cwt, down $6.16 from a week earlier.
The national average negotiated carcass price on the morning report today was $60.68/cwt. The western corn belt averaged $59.38/cwt and Iowa-Minnesota averaged $60.07/cwt for negotiated purchases this morning. There was no morning price quote for the eastern corn belt today.
Peoria had a top live price today of $42/cwt, down $4 from last Friday. The top price today for interior Missouri live hogs was $46.75/cwt, down $1.50 from the previous Friday.
This morning's pork cutout value was $80.61/cwt FOB the plants. That is down $5.82 from the week before. Wholesale belly prices were down a whopping $25.52/cwt this week. Pork belly prices usually trend lower at this time of year. Despite this week's decline, belly prices are still above the year-ago level.
Hog prices continue to be weak compared to the cutout value. This morning's national average hog carcass price was only 75.3 per cent of the pork cutout value.
This week's hog slaughter totaled 2.253 million head, down 2.6 per cent (1,000 head) from last week, but up 2.7 per cent from the same week last year. Year-to-date hog slaughter is up 8.0 per cent , but because of lighter slaughter weights, year-to-date pork production is up only 7.2 per cent .
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.2 pounds, unchanged from a week earlier and down 2.6 pounds from a year ago. This was the 31st consecutive week with weights lighter than last year.
Hog futures were lower this week. The December lean hog futures contract settled today at $59.20/cwt, down $4.40 for the week. February hog futures ended the week at $62.75/cwt, down $3.40 from the week before. April hogs lost $2.55 this week to close at $67.425/cwt.
The December corn futures contracted settled at $3.8225 per bushel today. That is up 2.5 cents from last Friday.
It has been a dry fall in much of the Midwest and that has moved harvest forward quickly. USDA estimates that, as of October 25, 75 per cent of the corn acres and 87 per cent of soybean acres had been harvested. Both numbers are ahead of the average for that date.
Hog producers appear to be doing a good job of managing the PED virus. The number of new cases continues to be lower than at this time last year.
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