The February WASDE lowered USDA's forecast of 2014 pork production from 1.7% above 2013 to 1.0% above 2013. It raised their forecast of 51-52% lean hog prices in 2014 to $61-65/cwt pounds of live weight, $1 higher than their January forecast.
USDA released their long term forecast this week. It has pork production increasing each of the next ten years. Over the coming decade, USDA predicts hog prices will average between $60/cwt and $61/cwt of live weight.
By 2023, USDA expects U.S. pork production to be 15.9% greater than last year. They are predicting 2023 pork exports will be up 26.6% from 2013 and 2023 pork imports will be up 14.0%.
The number of new cases of PED virus continues to climb. Each of the last 3 weeks added more than 200 new farms with the disease. As of January 26, the total number of infected swine farms was 2,962. (There is an uncertain amount of double counting in this data.) For what it's worth, my expectation is that 80% of U.S. sows will be infected by mid 2014. If PEDv hadn't come along, I think 2014 hog slaughter would have been up 2.5%. Now, I expect it to be down 1.5%. But, I'm looking for record weights which will leave 2014 pork production up 0.5% compared to 2013. Eventually, I expect nearly all U.S. swine herds will have PEDv before we can mount a drive to eradicate the disease.
Manitoba reported their first case of PED virus this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $82.54/cwt, up $2.28 from last Friday and up $1.44 from a year ago. The eastern corn belt averaged $81.32/cwt this morning. The western corn belt had a morning average of $87.57. Iowa-Minnesota reported an average of $88.34/cwt this morning. Peoria had a live price top this morning of $57/cwt. Zumbrota, MN had a $58/cwt top. The top price Friday for interior Missouri live hogs was $58.50, up 75 cents from the previous Friday.
Friday morning's pork cutout value was $93.72/cwt FOB the plants, up $2.55 from the week before and up $13.62 from a year ago. This morning's hog carcass price averaged 88.1% of the cutout value.
Hog slaughter this week totaled 2.113 million head, down 2.7% from the week before and down 1.2% compared to the same week last year. The average live weight of barrows and gilts in Iowa-Minnesota last week was 281.0 pounds, down 0.6 pound from a week earlier, but up 5.3 pounds from a year ago. This is the closest Iowa-Minnesota weights have been to the year-earlier level since October.
The February lean hog futures contract settled at $86.52/cwt today, down 5 cents from the previous Friday. April hog futures ended the week at $96.17/cwt, up $1.45 from the week before. May hogs gained 90 cents to close at $104.05. The June contract ended the week at $106.12/cwt. July closed at $105.70/cwt.
March corn futures ended the week with little change from the week before.