USDA’s September WASDE report predicted the feed and residual use of corn for the 2011-12 marketing year will total 4.7 billion bushels, down 6% from the year before and the lowest for any marketing year since 1995-96. Add-in other grains plus DDGS and total feed and residual for the coming year is the equivalent of 6.38 billion bushels, which is 4.4% less than the past year and the lowest of any marketing year since 2002-03.
USDA is predicting 2012 red meat and poultry production will total 92 billion pounds, down only 0.9% from this year and the lowest since 2009. That’s 4% less feed to produce 1% less meat. Either USDA is wrong, or feed efficiency is going to skyrocket in the coming year, or we face the possibility that USDA’s forecast of $7/bu for this fall’s corn crop is too low. Livestock prices have been record high this year, but profits are far from records. It seems likely that 2012 will bring more livestock price records, but because of record feed costs, little or no profit.
Retail pork prices averaged $3.512 per pound in August, up 4.6 cents from the month before, up 28 cents from August 2010, and 2.8 cents above the record high for grocery store pork set in May 2011. Adjusted for inflation, it is the highest pork price since October 2001. Choice beef prices were also record high during August. Unsurprisingly, the Consumer Price Index for food was also record high in August.
After four weeks of decline, the pork cutout value rose very slightly this week. USDA’s Thursday afternoon calculated pork cutout value was $95.22/cwt, up 23 cents from the previous Thursday. Loins and bellies were lower, butts and hams higher.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $82.07/cwt, up $3.09 from last Friday. The Friday morning price report for the western corn belt and for Iowa-Minnesota both averaged $86.08/cwt. Eastern corn belt barrows and gilts averaged $81.80/cwt of carcass. Friday’s top live hog price at Peoria was $53/cwt. Zumbrota’s top was $60/cwt. The top for interior Missouri live hogs was $60/cwt, up $2 from the previous Friday.
Hog slaughter totaled 2.287 million head this week, up 14.1% from last week which was light because of Labor Day, up 5.4% compared to the same week last year, and the largest weekly total since December. Barrow and gilt carcass weights for the week ending September 3 averaged 196 pounds, down 1 pound from a week earlier and also down 1 pound from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 267.2 pounds, up 3.7 pounds from the week before, but down 0.9 pounds compared to the same week last year. This is the sixteenth consecutive week Iowa-Minnesota weights have been below the year-earlier level.
Today’s close for the October lean hog futures contract, $87.35/cwt, was up 10 cents from last Friday. The December lean hog futures contract settled at $82.72/cwt, down 85 cents from the previous Friday. February settled at $87.67/cwt.