Hog prices ended the week nearly $4 higher than the week before, writes Ron Plain, agricultural economist, University of Missouri in his weekly Hog Outlook. The national weighted average carcass price for negotiated hogs Friday morning was $65.19 per hundredweight, up $3.82 per hundredweight from the previous Friday. The top live hog price Friday at Sioux Falls was $48.50 per hundredweight. The top at Zumbrota was $46 and Peoria’s top was $46.50 per hundredweight. The interior Missouri live top Friday was $47.50 per hundredweight, up $3.75 from last Friday.
The number of non-contract hog sales has been steadily declining, according to Plain. Negotiated sales dropped below 15 percent of barrows and gilts in 2002 and below 10 percent in 2006. For July thru October less than 5 percent of market hog slaughter was negotiated. Today, there were no negotiated purchases on a carcass weight basis in the Western Corn Belt on USDA’s morning price report. The average carcass price this morning in the eastern corn belt was $65.21 per hundredweight.
Increased daily hog slaughter and record weights this fall are pushing more pork into cold storage. At the end of October, stocks of frozen pork were down 7.4 percent from the year before, but up 12.7 percent from the month before, and up 23.1 percent from the end of August. The frozen pork stocks were the lowest for any October since 2005. Beef and turkey stocks in cold storage were both down from 12 months earlier, but frozen broiler stocks were up 15 percent, adds Plain.
The U.S. economy added fewer jobs than expected during November and the unemployment rate climbed to 9.8 percent, the highest in seven months. This is not good news for meat demand. Retail meat prices have been fairly high in recent months, not because of strong demand, but because of small supplies. Per capita meat consumption in 2010 is expected to be the lowest since 1997. Per capita meat supplies are expected to drop another 1.7 pounds in 2011. This will help hold up meat prices at the expense of a smaller livestock industry. USDA is forecasting 2011 per capita pork consumption at 46.7 pounds of retail weight, the lowest since 1978.
The average carcass weight of barrows and gilts slaughtered the week ending November 20 was 205 pounds, tying the record weight of the previous three weeks, and 5 pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 275 pounds, the same as the week before and up 5.5 pounds compared to a year earlier.
USDA’s Thursday afternoon calculated pork cutout value was $77.89 per hundredweight, down $1.53 from the previous Thursday. Hams were slightly higher this week while loins, butts, bellies were lower.
Hog slaughter totaled 2.319 million head this week, up 12.4 percent from Thanksgiving week and up 1.8 percent compared to the same week last year. Pork production is down 3.3 percent for the year, but it has been above year-ago for each of the last seven weeks.
The December lean hog futures contract ended the week at $69.27 per hundredweight, down $1.08 from the previous Friday. The February contract ended the week at $76.57 per hundredweight and April settled at $80.27.
December corn futures ended the week at $5.59 per bushel, up 21 cents from the previous Friday.
Source: Ron Plain, University of Missouri