Hog Outlook: Pork Retail Price On the Up

US - The average retail price of pork during August was $3.796 per pound. That was up 1.5 cents from the month before, but down 3.8 cents from August 2015, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 19 September 2016
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The average live price for 51-52 per cent lean hogs was $48.12/cwt in August which is $8.16 lower than the month before, $7.79 lower than a year ago, and the lowest for any month since March.

USDA's September crop production estimates left wheat unchanged, reduced corn production by 60 million bushels and increased soybean production by 141 million bushels compared to their August forecasts. Both corn and soybean production are expected to be new records this year. USDA expects corn to average somewhere between $2.90 and $3.50 in the marketing year that began on September 1.

On the meats, USDA lowered slightly their forecasts of 2016 production of beef, pork and chicken. They left unchanged their forecast of 2017 red meat production. They expect live hog prices to average close to $47/cwt this year and roughly $43.50/cwt next year.

Slaughter hog prices were $1 to $4 lower this week as hog slaughter continues to run at record high levels for this time of year. The national negotiated barrow and gilt price averaged $53.13/cwt on the morning report today, down $4.01 from a week earlier and down $12.51 from a year ago. The western corn belt averaged $52.88/cwt this morning and Iowa-Minnesota averaged $53.54/cwt. There was no regional price quote this morning for the eastern corn belt.

The top hog price today at Peoria was $35/cwt, unchanged from a week ago. Today's top price for interior Missouri live hogs was $39.00/cwt, down $1.50 from last Friday.

Friday morning's pork cutout value was $81.09/cwt FOB slaughter plants. That is up 1 cent from the week before. Loin, belly and butt prices were higher, hams lower. This morning's national negotiated hog price is only 65.5 per cent of the cutout value.

Hog slaughter this week totaled 2.359 million head, up 13.2 per cent from last week which was light because of the Labor Day holiday, up 3.1 per cent from the same week last year, and the most for any week since the first full week of January.

The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.2 pounds. That is up 3.4 pounds from the week before, but down 0.4 pound from the same week last year.

Hog futures were sharply lower this week. The October lean hog futures contract ended the week at $55.475/cwt, down $3.75 from the preceding Friday. Today, December hogs settled at $49.95/cwt, down $3.975 from last Friday. The February contract settled at $54.375, down $4.40 for the week. June hogs settled at $70.025 today.

Corn futures were lower this week. The December corn futures contract lost 4 cents this week to close at $3.37 per bushel. March corn futures closed 4.25 cents lower than last Friday at $3.4725/bu. May ended the week at $3.545 per bushel.

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