Hog Outlook: US Hog Inventory Up in March

US - The March Hogs and Pigs report said the nation's hog inventory was up 0.4 per cent on the first day of March. The breeding herd was down a tiny 0.03 per cent and market hog numbers were up 0.4 per cent, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 29 March 2016
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Winter farrowings were down 0.8 per cent. Spring farrowings are forecast to be down 0.5 per cent with summer farrowings down 3.5 per cent. Pigs per litter during December-February were up 0.7 per cent, but because of fewer litters the pig crop was down 0.2 per cent. The market hog inventory was a bit larger than trade expectations and the breeding herd a bit smaller. Farrowing intentions for June-August are 3.8 per cent less than the average trade forecast.

This week Prestage Foods of Iowa LLC announced plans to build a large hog slaughter plant in Mason City, Iowa. The plant will employ 1,000 workers and slaughter 10,000 hogs per day on a single shift. The 650,000 square foot plant is expected to cost $240 million and to begin operations in 2018. It is being designed to allow the possibility of a second shift in the future. The pork industry will soon have a lot more slaughter capacity. Clemens Foods is building a large hog slaughter plant in Coldwater, MI and Triumph-Seaboard is building a new plant in Sioux City, IA. These two plants should open in 2017.

There were 628 million pounds of pork in cold storage at the end of February. That was 0.5 per cent more than the month before, but 8.4 per cent less than a year ago.

Cash hog prices were steady to $1.50 higher this week. The national negotiated barrow and gilt price averaged $61.24/cwt on the morning report today, up $1.41 from last Friday morning. There were no regional negotiated price quotes this morning for the eastern corn belt, western corn belt, or for Iowa-Minnesota.

The top price today at Peoria was $38/cwt, unchanged from last Friday. The top price for interior Missouri live hogs today was $41.25/cwt, also unchanged from a week ago.

Friday morning's pork cutout value was $75.26/cwt FOB the plants. That is down $1.40 from the week before, but up $9.18 from a year ago. Loin, ham, and belly prices were each lower this week. This morning's national negotiated hog price was 81.4 per cent of the cutout value.

This week's hog slaughter was 2.178 million head, down 0.4 per cent from last week and down 4.4 per cent from the same week last year. Slaughter will be light on Monday because several plants give their workers the day off for Easter.

The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 282.9 pounds, down 0.5 pound from the week before and down 1.3 pounds from a year ago.

The Chicago futures market is closed today for Good Friday. On Thursday, the April hog futures contract ended the week at $69.625/cwt, down $1.825 from the previous Friday. May hogs lost $3.125 this week to close at $76.65/cwt. The June lean hog futures contract ended the week at $80.85/cwt, down $3.05 from the preceding week.

The May corn futures contract settled at $3.70 per bushel today. That is up 3 cents from last Friday.

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