According to farm income projections released this week by USDA, cash receipts for hogs will rise to $27.7 billion in 2014. This would mark a 20 percent increase over last year, and leave industry receipts 89 percent higher than they were as recently as 2009.

The USDA Cold Storage report released on Aug. 22 showed that total stocks of beef, pork, chicken and turkey in U.S. freezers at the end of July were 292 million pounds less than July 2013, a decrease of 12.7 percent. This is the fifth consecutive month where total meat stocks were at least 12 percent below the year ago level. Pork stocks were not contributing much to the total decline, down only 2.7 percent vs. year ago in July after trailing year ago levels by 16.7 percent as recently as 3 months ago.

USDA released the preliminary August hog to corn feed ratio in yesterday's Ag Prices report. It now stands at 23.9, the highest level in 8 years. This ratio has increased for three months in a row and 13 of the past 17 months, and is now almost 2.9 times greater than the March 2013 level of 8.3.

The national average negotiated carcass price for direct delivered hogs on Friday's morning report was $90.56/cwt. That was down $3.66 from the week before, but up $4.01 compared to a year ago. Neither the eastern Corn Belt nor western Corn Belt reported hog sales on the morning report of Aug. 29, nor did Iowa-Minnesota. Peoria had a top price Friday of $62/cwt, with Zumbrota at $63/cwt. Interior Missouri live hogs had a top price of $66/cwt, down $7.50 compared to the previous Friday.

The pork cutout value gained ground three out of five days last week but still suffered another drop for the week as a whole. Friday's cutout was $101.62/cwt FOB the plants, down $5.14 from last Friday and now down over 25 percent from the July 18 high. The cutout is still $6.32 above a year ago. All of the primal cuts were down for the week, with bellies posting the largest weekly decline after Wednesday's big drop. Friday morning's hog carcass price equaled 89.1 percent of the pork cutout value.

Last week's hog slaughter totaled 1.979 million head, down 0.6 percent from the week before and down 10.4 percent from the same week last year. The average live slaughter weight of barrows and gilts in Iowa-Minnesota for the week ending Aug. 24 was 282.1 pounds, down 0.4 pounds from the week before, but again 10.5 pounds heavier than the same week last year. This was the 15th consecutive week with weights at least 10 pounds heavier than a year ago.

Despite the lower cash bids, hog futures were higher last week. The October hog futures contract ended the week at $98.12/cwt, up $5.25 from the previous Friday. December hogs posted a rise of $4.85 this week to close at $92.00/cwt. The February lean hog contract settled at $90.82/cwt, a gain of $4.30. The September corn futures contract recovered somewhat from sharper drops earlier in the week, but still finished six cents lower for the week at $3.59 per bushel.