Hog Outlook: Mexican Demand Drove September Pork Exports

US - The US exported 415.741 million pounds of pork (carcass weight equivalent) during September. That was down 0.1 per cent from August, but up 3 per cent from a year ago. Most of the increase was because Mexico bought more US pork than in September 2015, write Ron Plain and Scott Brown, Ag Economics, MU.
calendar icon 14 November 2016
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September pork imports equaled 84.467 million pounds, down 6.5 per cent from August and down 7.6 per cent from September 2015. The year-over-year decline is mostly due to less pork from Canada.

September pork exports equaled 19.6 per cent of US production and imports equaled 4.0 per cent of production.

USDA has increased their forecast of 2016 pork production by 0.14 per cent and decreased their 2017 forecast by 0.25 per cent. They expect 2016 pork production to be 1.8 per cent above last year's record and 2017 to be 3.4 per cent higher than this year. They are predicting that this year's hog price will be the lowest since 2009 and next year the lowest since 2003.

The national negotiated barrow and gilt carcass price averaged $41.15/cwt on the morning report today, down $1.56 from a week earlier and down $9.54 from a year ago. The western corn belt averaged $41.21/cwt this morning. Neither the eastern corn belt nor Iowa-Minnesota had a morning price quote.

Friday morning's pork cutout value was $74.90/cwt FOB slaughter plants. That is up $1.39 from the week before and up $1.86 from a year ago. Loin prices continue to be very weak. This morning's average loin price ($68.59/cwt) is only 91.6 per cent of the pork cutout value and is lower than primal hams ($70.92/cwt).

This morning's national negotiated hog carcass price is only 54.9 per cent of the cutout value.

The top hog price today at Peoria was $25/cwt, unchanged from a week ago. Today's top price for interior Missouri live hogs was $27.75/cwt, down 75 cents from last Friday.

This week's hog slaughter totaled 2.452 million head, down 2.8 per cent from last week, but up 2.5 per cent from the same week last year.

The average slaughter weight of barrows and gilts in Iowa-Minnesota last week was 280.8 pounds. That is down 0.1 pound from the week before and down 3.5 pounds from the same week last year.

Hog futures were higher this week. The December lean hog futures contract ended the week at $47.125/cwt, up 97.5 cents from the preceding Friday. February hogs settled at $54.35/cwt, up $1.375 from last Friday. The April contract settled at $61.75, up $1.35 for the week. June hogs settled at $73.125 today.

USDA raised their estimate of 2016 corn yield by 1.9 bushels to 175.3 bushels per acre. Total corn production is pegged at 15.226 billion bushels. USDA expects the 2016-17 farm price to average $3.30/bu plus or minus 30 cents.

The four nearby corn futures contracts ended the week 8.5 cents lower than last week. The December corn futures contract settled at $3.4025 per bushel. March corn futures closed at $3.49/bu. May corn futures ended the week at $3.565/bu. July corn settled at $3.64/bushel.

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