Hog Outlook: Pork prices high, but fall from previous months

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The average price of a pound of pork at retail during November was $3.776 per pound, up 29.8 cents from a year earlier. November was the third highest month ever for retail pork prices behind the two prior months.

The average price of 51-52% lean hogs was $60.21/cwt in November. That was the lowest month since April.

Testing data from the National Animal Health Laboratory Network says that as of December 8, the PED virus has been confirmed on 1,645 swine premises in 20 states. This is an increase of 132 locations from the week before. This was the second largest weekly increase after the 141 premises added the week before. Iowa accounts for 34% of the positive cases. There is an unknown amount of double counting in this data.

USDA will publish their December hog survey results next Friday. I expect them to say the breeding herd is up 1.0%, but the market hog inventory is down 0.3%. Because of the PED virus, there is more than the usual amount of interest and uncertainty in advance of this report.

Friday morning's pork cutout value based on mandatory price reporting was $87.41/cwt FOB plants, up 87 cents from the week before and up $5.51 from a year ago. This morning's hog prices averaged 88.0% of the cutout value.

Hog prices were roughly $1 lower this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $76.96/cwt, down 65 cents from seven days ago and down $1.78 from a year ago. There were no regional hog price reports this morning due to confidentiality rules associated with light volume. Peoria had a live price top this morning of $53/cwt. Zumbrota, MN topped at $51/cwt. The top price for interior Missouri live hogs Friday was $55.75/cwt, down 75 cents from last Friday.

Hog slaughter this week totaled 2.353 million head, up 1.5% from the week before, but down 0.2% compared to the same week last year.

The average live weight of barrows and gilts in Iowa-Minnesota last week was 281.3 pounds, down 1.1 pound from a week earlier, but up 7.7 pounds from a year ago. This ended a string of six consecutive weeks which had new record highs for this weight series. Over the last 8 weeks, hog slaughter has been down 1.5% compared to last year, but because of heavier weights pork production was up 1.3%.

The February lean hog futures contract settled at $86.25/cwt today, down 92 cents from the previous Friday. April hog futures ended the week at $91.17/cwt, down 33 cents from the week before. May hogs gained 68 cents to close at $98.40. The June contract ended the week at $100.50/cwt.

March corn futures ended the week at $4.3325 per bushel, up 7.75 cents from the week before. March soybean meal ended the week at $433.60/ton which was up $10.40 from the week before.

Source: Ron Plain and Scott Brown



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