Hog Outlook: Cash hog price explosion slows

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USDA's March Hogs and Pigs report was bearish for hog prices. As expected, pigs per litter came in far below the year-earlier level. The nation averaged 9.53 pigs per litter in the December-February quarter. That was down 5.5 percent from a year ago. Prior to this, the biggest year-over-year decline in pigs per litter in the last 30 years was 1.68 percent in June-August 1988.

But, USDA said the number of sows farrowed during December-February was up 2.8 percent. The trade was expecting no change. USDA said farrowing intentions for March-May is up 2.4 percent and June-August is up 2.0 percent. More litters than expected will partially offset the decline in pigs per litter being caused by the PED virus. More total pigs than expected means a more moderate rise in hog prices.

Heavier slaughter weights are also adding to the pork supply. The average live weight of barrows and gilts in Iowa-Minnesota last week, 285.0 pounds, was record high for the second consecutive week. The average weight was up 1.1 pound from a week earlier and up 8.8 pounds from a year ago.

The April lean hog futures contract settled at $123.15/cwt today, down $2.60 from the previous Friday. May hog futures ended the week at $120.50/cwt, down $4.70 from the week before. Summer hog futures ended the week $8-$9 lower than last Friday. June hogs lost $9.02 this week to close at $120.55/cwt. The July contract ended the week at $117.55/cwt, down $8.65 for the week. August closed at $117.15/cwt, off $8.82 from the previous Friday.

After 10 weeks with big price gains, cash hog prices this week were only slightly higher. The national average negotiated carcass price for direct delivered hogs on the morning report today was $125.34/cwt, up 18 cents from last Friday, up $42.80 from seven weeks ago, and up $47.81 from a year ago. The eastern corn belt reported a morning average of $125.49/cwt. The western corn belt had a morning price quote of $125.04. There was no Iowa-Minnesota hog price quote this morning. Peoria had a top live price today of $87/cwt. Zumbrota, MN had snow and no price report today. The top price Friday for interior Missouri live hogs was $90.50/cwt, up $1.50 from the previous Friday.

Wholesale pork belly prices went above $200 for the first time ever on Wednesday. This morning bellies were $202.72/cwt.

Friday morning's pork cutout value was $132.46/cwt FOB the plants, up $1.53 from the week before and up $55.18 from a year ago. This morning's hog carcass price averaged 94.6 percent of the cutout value.

There were 247 new farms with positive tests for the PED virus during the week ending on March 23. That was the fewest since the week ending January 19. Hopefully, new outbreaks will continue to decline as the weather warms. There are now more than 5,270 U.S. hog farms with the PED virus.

Hog slaughter this week totaled 2.03 million head, down 0.1 percent from the week before and down 3.2 percent compared to the same week last year.



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