Last week saw the first $1 per pound hog carcass prices since June. The national average negotiated carcass price for direct delivered hogs on the Friday report was $100.01/cwt, up $6.78 from last Friday. The Friday morning price report for the western corn belt was $101.55/cwt. Iowa-Minnesota averaged $100.91/cwt. The eastern corn belt averaged $98.80/cwt. Friday's top live hog price at Peoria was $66/cwt. Zumbrota's top was $69/cwt. The top for interior Missouri live hogs was $69.75/cwt, up $2.25 from the previous Friday.
The pork cutout value rose for the fourth consecutive week. USDA's Thursday afternoon calculated pork cutout value was $104.18/cwt, up $4.45 from the previous Thursday and a new record high. Loins, hams, butts, and bellies were all higher this week. Friday morning's national average hog carcass price equaled 96% of the pork cutout value.
On July 21 Chinese officials reported an outbreak of foot and mouth disease in Guizhou province. Chinese hog producers have been battling PRRS and pork prices there are already high. This increases the likelihood that China will be importing more pork in coming months.
The annual July survey of livestock forecasters by the Extension Section of the AAEA indicates on average they expect pork production to be up 0.8% in the second half of 2011 and up 0.5% in 2012. Survey respondents predict that this slow rate of growth will lead to more hog price records. The consensus forecast is for barrow and gilt prices, on a live weight basis, to average $69.30/cwt in the current quarter and $62.98/cwt in the fourth quarter of 2011. For the first through fourth quarter of 2012, the averages of the live weight price forecasts for market hogs are: $64.64/cwt, $69.23/cwt, $68.97/cwt, and $62.99/cwt, respectively. They expect 2012 market hog prices to average $1/cwt higher than this year.
Hog slaughter totaled 1.992 million head last week, down 0.9% from last week, but up 2.2% compared to the same week last year. Barrow and gilt carcass weights for the week ending July 16 averaged 199 pounds, down 1 pound from a week earlier and the same as a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 263.7 pounds, down 2.9 pounds from the week before, down 4.7 pounds compared to the same week last year, and the lightest of any week since July 4, 2009. This is the ninth consecutive week Iowa-Minnesota weights have been below the year-earlier level. Given the extremely hot weather, slaughter weights are likely to continue to be very light.
The August lean hog futures contract settled today at $102.77/cwt, up $1.95 from the previous Friday. The October hog contract settled Friday at $92.40/cwt, down 17 cents for the week. December hogs settled at $88.52 and February closed at $90.50/cwt.
The September corn futures contract lost 25 cents this week to settle at $6.655/bu. December corn futures close at $6.6875, down 17 cents from the previous Friday.