USDA’s September hog inventory survey said summer (June-August) farrowings were down 1.2% from a year ago. They forecast fall farrowings to be down 2.7% and winter farrowings to be down 1.5% compared to 12 months earlier. Summer farrowings were 0.4% lower than trade expectations. Fall farrowing intentions are 1.4% lower than expected, but winter farrowing intentions are 0.1% above the trade forecast.
I think the 2.7% year-over-year decline in September–November farrowing intentions is questionable. It is double the decline producers reported in the June survey. Given the 114 day sow gestation period, the drop in fall farrowings implies May-July matings were down 2.7%. December corn futures declined through the spring to $5.06/bu on June 15 before starting to climb due to dry weather. Did hog producers really respond that quickly to cut May-July matings and/or sell piggy sows?
The number of pigs per litter during June-August, 10.13 head, was up 1.0% from a year ago and a new record. The summer pig crop was down 0.2%.
USDA’s survey indicated the number of market hogs weighing 180 pounds or more on September 1 was up 4.5% compared with 12 months earlier. The 120-179 pound market hog group was up 0.6%; the 50-179 pound inventory was down 1.2%; and the inventory of pigs weighing less than 50 pounds was down 0.5% compared to a year earlier. The contrast between the 180 pound plus inventory and the other weight groups is likely due to bunched marketings in September caused by a hot summer and record feed costs.
Hog slaughter this week totaled 2.355 million head, up 0.4% from the week before and up 0.9% compared to the same week last year. The average barrow and gilt live weight in Iowa-Minnesota last week was 269.2 pounds, down 1.0 pound from a week earlier and down 1.3 pounds from a year ago. This week’s estimated pork production, 476.7 million pounds, is below year-ago for the first time since mid July.
Hog prices were higher again this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $76.40/cwt, up $2.21 from last Friday and up $12.85 from three weeks ago. The eastern corn belt averaged $76.39/cwt on the morning report today. Both the western corn belt and Iowa-Minnesota had a morning average negotiated price of $76.51/cwt. Peoria had a top live price this morning of $52/cwt. Zumbrota, MN topped at $54. The top for interior Missouri live hogs was $55/cwt, up 75 cents from the previous Friday.
The Thursday afternoon calculated pork cutout value was $84.95/cwt, up $4.67 from the previous Thursday, but $12.96 lower than a year ago. Loins, butts, hams and bellies all were higher this week.
Hog futures were higher this week. Friday's close for the October lean hog futures contract was $81.32/cwt, up $4.15 from the previous Friday. December hog futures ended the week $2.80 higher at $76.55. February hogs settled at $82.00/cwt.
Source: Ron Plain and Scott Brown