The recent declines in hog prices will reverberate throughout the marketing chain, but the most noticeable near-term impact will likely be on hog producer returns. In October, compared to a year ago, hog producer returns were down as were estimated margins (price spreads) for the packers. In contrast, calculated margins at the retail level were above 2014’s.
Through the month of October, farrow-to-finish hog producers turned profits for six consecutive months in recent months as indicated by Iowa State University (ISU) estimates.
Live cattle prices saw a dip of $1.93 on Tuesday, hitting $130.25. The 27-day average price now rests at $135.20. Feeder cattle prices saw a 72-cent fall to $164.68 on Tuesday, bringing the 27-day average price to $182.24.
Throughout the United States retail diesel prices dropped an average of four cents this week to hit $2.45. The highest drop in the country was in the Midwest region, where prices fell five cents to hit $2.44. The lowest fall was one cent in the Rocky Mountain region. The highest prices are in the West Coast region at $2.65, while the lowest are in the Midwest at $2.44.
Chicago wheat futures edged lower on Tuesday, giving up some of last session's gains, as a further improvement in the condition of the U.S. winter crop put attention back on ample global supply of the staple cereal.
Live hog prices fell below $40 per hundredweight last week. This means hog prices are at their lowest level since November of 2009 when the U.S. was just beginning to pull off the bottom of the great recession. The source of the current downturn in prices seems to have components from both supply and demand.
Live cattle prices saw a slight dip of 20 cents on Friday to hit $129.70. The 27-day average price now rests at $135.44. Feeder cattle prices jumped from $162.45 on Thursday to $163.65 on Friday, bringing the 27-day average price to $184.22.
Lean hog prices also saw a big jump of $2.05 to hit $57.45, bringing the 27-day average price to $59.25.
Corn and wheat prices both dipped one and two cents respectively.