Nearby hog futures and cash hog prices continued to slide this week. Cash hog prices have dropped to $46 per hundredweight on a carcass basis or just $34 per hundredweight on a live basis. That is a losing proposition for producers with corn prices near $3.70 per bushel. The big losses may discourage some of the plans for farrowings both this quarter and next.
However, for now hog supplies are still huge and packers have no need to raise bids to get all the hogs they can handle. Packers’ margins are the best they have been in years as pork cutout values have held up fairly well during the huge production.
While nearby futures prices have plummeted, deferred contracts have remained about steady. The June contract has recovered nearly $2 per hundredweight since late October, while the nearby December contract has declined by more than $3.
Source: Doane’s Agricultural Report www.doanes.com