Hog Outlook: Pork exports up despite record prices

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Despite record prices, U.S. pork exports were up a huge 21.7% in March compared to a year ago thanks to increased shipments to China, Mexico, South Korea, Colombia, Philippines and Australia. Imports of pork were up 11.5% in March due to more pork coming in from Canada, Denmark and Poland. During March, pork exports equaled 26.1% of production and imports equaled 4.3% of production. During the first quarter of 2014, U.S. pork exports were up 10.4% and pork imports were up 2.4%. Feeder pig imports were down 0.8% in March. Imports of other hogs were down 4.3%.

The May WASDE lowered USDA's forecast of 2014 pork production by 105 million pounds. They now predict 2014 pork production will be down 2.3% from last year to the lowest level since 2010. USDA's forecast for live hog prices in 2014 is for an average somewhere between $76/cwt and $80/cwt which is well above the 2011 record of $66.12/cwt. They are predicting 2.9% more pork in 2015 than this year.

Domestic meat demand in March was up 3.2% compared to a year earlier with pork demand up 0.9% compared to a year ago. March was the 15th consecutive month in which domestic pork demand was above the year-ago level. Export demand for U.S. pork was up an astounding 65.2% in March.

This week's USDA Crop Progress report says that 29% of corn acres were planted by May 4. That was 18 points ahead of last year, but 13 points below the 5 year average.

Cash hog prices this week were lower for the fifth consecutive week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $107.11/cwt, down $2.08 from last Friday, but up $17.85 from a year ago. There was no eastern corn belt or Iowa-Minnesota reported price this morning. The western corn belt averaged $108.24/cwt this morning. Peoria had a top live price today of $75/cwt. Zumbrota, MN topped at $76. The top price Friday for interior Missouri live hogs was $74.25/cwt which was down $2.25 from the previous Friday.

Friday morning's pork cutout value was $112.35/cwt FOB the plants, down $1.77 from the week before, but up $22.00 from a year ago. This morning's hog carcass price averaged 95.3% of the cutout value.

Hog slaughter this week totaled 2.016 million head, down 0.1% from the week before and down 3.3% compared to the same week last year. After setting record highs for six consecutive weeks, Iowa-Minnesota slaughter weights were down last week. The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week, 287.0 pounds, was down 0.5 pounds from a week earlier, but up 10.2 pounds from a year ago.

The May lean hog futures contract closed at $114.67/cwt, down $2.55 for the week. June hog futures ended the week at $120.17/cwt, down $2.05 from the week before. July hogs gained $2.58 this week to close at $124.55/cwt. The August contract ended the week at $122.50/cwt. October closed at $104.15/cwt.

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