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Hog Outlook: Pork in Cold Storage Up

29 February 2016, at 12:00am

US - USDA says there were 637 million pounds of pork in cold storage at the end of January. That is up 16.7 per cent from the month before, up 6.9 per cent from a year ago, and the most ever for January. Frozen beef stocks were also record high for January, writes Ron Plain and Scott Brown, Ag Economics, MU.

At times, increases in stocks of frozen red meats have preceded increases in exports. Let's hope that's the case this time.

In what should be good news for domestic meat demand, the Commerce Department says that consumer spending increased 0.5 per cent in January, the most for any month since May. The government revised their estimate of Gross Domestic Product growth during the fourth quarter of 2015 from an annual rate of 0.7 per cent to 1.0 per cent . For all of 2015 GDP grew at a rate of 2.3 per cent.

Last year was the third consecutive year with stronger domestic demand for pork. Measured at the retail level, pork demand was up 4.2 per cent . However, last year export demand for U.S. pork was down 11.8 per cent compared to 2014.

After seven consecutive Fridays with higher prices, the national negotiated barrow and gilt price on the morning report today averaged $61.41/cwt, down 81 cents from last Friday morning. There were no regional negotiated price quotes this morning for the eastern corn belt, western corn belt, or Iowa-Minnesota.

The top price today at Peoria was $38/cwt, down $2 from last Friday. The top price for interior Missouri live hogs today was $44.25/cwt, up 75 cents from a week ago.

Friday morning's pork cutout value was $74.28/cwt FOB the plants. That is down 19 cents from the week before, but up $4.30 from a year ago. Loin and belly prices were lower this week, but ham prices were a bit higher.

This morning's national negotiated hog price was 82.7 per cent of the cutout value.

This week's hog slaughter was 2.211 million head, down 3.6 per cent from last week and down 2.1 per cent from the same week last year.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.6 pounds, up 1.2 pounds from the week before and unchanged from a year ago. This is the first week since November in which Iowa-Minnesota slaughter weights have not been below the year-ago level.

The April hog futures contract ended the week at $70.85/cwt, up $1.95 from the week before. May hogs gained $1.65 this week to close at $76.925/cwt. The June lean hog futures contract ended the week at $80.85/cwt, up $1.70 from the preceding week. July hogs closed at $80.475/cwt.

The March corn futures contract settled at $3.545 per bushel today. That is down 11 cents from last Friday.

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