For the third quarter of 2013, while USDA is forecasting slightly higher year-over-year commercial pork production (0.6 percent) due to higher expected slaughter numbers and slightly higher average dressed weights, hog producers are expected to receive higher prices for hogs than a year ago, signaling continued strong demand for hogs.

The live equivalent price of 51-52 percent hogs is forecast to average $67-$69 per cwt, almost 11percent higher than a year ago. Lower feed costs from an expected larger U.S. corn crop, in particular, should also contribute to improving producer returns. Third-quarter pork exports are expected to be almost 5 percent lower than a year ago, which along with steady imports points to a 1.5 percent yearover-year higher domestic pork supply.

This larger quantity of pork available to domestic markets is expected to result in slightly lower retail pork prices. Thirdquarter retail pork prices are expected to average in the low $3.40’s per pound, compared with $3.49 per pound in the third quarter a year ago. The moderation in retail pork prices is likely attributable, in part, to the higher domestic pork supplies and moderating retail chicken prices.

Table 1: Key statistics for the U.S. pork industry, first-half 2013 compared with first-half 2012

 

2013: First-half
(January – June)

2012: First-half

(January – June)

Percent Change

Commercial hog slaughter1
(thousand head)

54,651

54,765

-0.21

Slaughter days*

127

128

 

Avg. daily slaughter rate*
(thousand head per day)

430

428

 

Avg. price, live equivalent2
51-52% lean hogs
($/hundredweight)

62.25

61.74

0.83

Avg. Iowa State Univ. pork producer returns3
(Average $/head/month)

-21.67

-0.688

 

Avg. farm price of corn2

7.01

6.29

11.45

Avg. price 48% soybean meal, Decatur2
($/ton)

449.00

373.50

20.21

Commercial pork production1
(million lbs.)

11,296

11,377

-0.71

U.S. pork exports4
(million lbs.)

2,444

2,743

-10.90

Pork disappearance2
(million lbs.)

9,259

8,919

3.81

Avg. retail pork price5
($/lb.)

3.4675

3.4575

0.29

*Based on a 5 day w eek

1 USDA\NASS. http://quickstats.nass.usda.gov/

2 USDA\OCE. http://www .usda.gov/oce/commodity/wasde/index.htm

3 Iowa State University. http://www .econ.iastate.edu/estimated-returns/

4 USDA\ERS. http://www .ers.usda.gov/data-products/livestock-meat-international-trade-data.aspx

5 USDA\ERS. http://www .ers.usda.gov/data-products/meat-price-spreads.aspx