Hog Outlook: Hog Inventory is Up 2.6 Per Cent

US - USDA's September survey of the US swine herd says the market hog inventory is up 2.6 per cent and the breeding herd is up 0.5 per cent compared to September 1, 2015, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 3 October 2016
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USDA said summer farrowings were up 0.2 per cent. The survey indicated fall farrowings would be down 0.03 per cent and winter farrowings down 0.06 per cent.

A major concern for the industry is whether there will be adequate slaughter capacity this fall. The Hogs and Pigs report said that the inventory of market hogs by weight group was: 180+ pounds up 4.1 per cent; 120-179# up 3.7 per cent, 50-119# up 1.9 per cent and under 50 pounds up 1.7 per cent.

The average of pre-release trade predictions was for the breeding herd to be up 0.6 per cent and the market hog inventory to be up 1.1 per cent.

There were 607 million pounds of pork in cold storage at the end of August. That is 1.4 per cent more than the month before, but 7.1 per cent less than a year ago. Stocks of beef in cold storage were up 1.3 per cent year-over-year, but frozen chicken stocks were down 0.7 per cent to the lowest level since July 2015.

Last week's hog slaughter, 2.466 million head was the third largest ever. This week's hog slaughter totaled 2.436 million head. That is the fourth largest weekly slaughter ever. This week's total is down 1.2 per cent from last week, but up 7.4 per cent from the same week last year.

Slaughter hog prices were roughly $2 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 $47.87/cwt on the morning report today, down $2.07 from a week earlier and down $21.96 from a year ago. The western corn belt averaged $48.13/cwt this morning, down $1.23 from last Friday. Iowa-Minnesota also averaged $48.13 this morning. There was no regional price quote this morning for the eastern corn belt.

The top hog price today at Peoria was $29/cwt, down $3 from a week ago. Today's top price for interior Missouri live hogs was $34.50/cwt, down $2.25 from last Friday.

Friday morning's pork cutout value was $73.47/cwt FOB slaughter plants. That is down $3.80 from the week before. Loin, ham and butt prices were lower; belly prices were a bit higher. This morning's national negotiated hog price is only 65.2 per cent of the cutout value.

The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.0 pounds. That is down 1.6 pounds from the week before, but up 0.3 pounds from the same week last year.

This was the second week that weights were above the year-ago level since the week ending July 16.

Hog futures were sharply lower this week. The October lean hog futures contract ended the week at $49.025/cwt, down $4.975 from the preceding Friday. Today, December hogs settled at $43.975/cwt, down $4.925 from last Friday. The February contract settled at $48.90, down $4.45 for the week. June hogs settled at $67.075 today.

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