Hog Outlook: Looking at the USDA's Hogs and Pigs Report

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USDA's latest Hogs and Pigs Report said the market hog inventory was down a tiny 0.04% at the start of December and the breeding herd was up 0.2%.

USDA said September-November farrowings were down 1.0%, but because of a 1.3% increase in pigs per litter, the fall pig crop was 0.3% larger than a year ago. Pre-release trade estimates were for a 1% smaller pig crop.

Survey respondents predicted December-February farrowings would be down 1.6% and forecast March-May farrowings to be down 1.2%. The USDA numbers are much more bearish than the average of the pre-release trade estimates.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $80.40/cwt, up $1.66 cents from last Friday. The western corn belt was $2.92 higher than last Friday at $81.64/cwt. The eastern corn belt averaged $79.95/cwt and Iowa-Minnesota had a morning price average of $83.16/cwt today.

Peoria had a live top of $52.50/cwt on Friday. Zumbrota had a top today of $56/cwt. The top for interior Missouri live hogs Friday was $55.75/cwt, unchanged from the previous Friday.

The Thursday afternoon calculated pork cutout value was $81.56/cwt, down 34 cents from the previous Thursday. Loins and hams were lower, pork bellies steady, and butts a bit higher. The pork cutout value is $4.47/cwt lower than a year ago.

The national average hog carcass price this morning is 98.6% of the cutout value, which is high.

Because of Christmas, hog slaughter was light this week. Hog slaughter this week totaled 1.755 million head, down 25.0% from the week before and down 10.5% compared to the same week last year.

The average barrow and gilt live weight in Iowa-Minnesota last week was 273.6 pounds, unchanged from a week earlier and down 2.1 pounds from a year ago. This was the 13th consecutive week with weights under the year-ago level.

Year-to-date hog slaughter is up 1.7% while pork production is up 1.8%.

Hog futures lost ground this week. Friday's close for the February lean hog futures contract was $86.37/cwt, down 53 cents from the previous Friday. April hog futures ended the week $1.50 lower at $90.12/cwt. May hogs settled at $97.60/cwt; June hogs at $99.60/cwt.

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