Insight: Ron Plain’s hog report
Each year at their outlook forum, USDA takes a long term look at U.S. agriculture. Last month they forecast this year's commercial pork production at 22.56 billion pounds. That is slightly more than last year, but less than in 2009. USDA expects pork production in both 2012 and 2013 to be lower than this year. They predicted U.S. pork production would remain below the 2008 record of 23.347 billion pounds through 2015.
USDA is forecasting that U.S. pork exports will increase each year with 2020 export tonnage up 28% from 2010. U.S. pork imports are also expected to increase annually with 2020 imports up 27% compared to last year. If they are right on these numbers, net pork exports will be 28% higher in 2020 than in 2010.
We exported 19% of U.S. production last year. By 2020 USDA expects pork exports to equal 22% of production. Last year, pork imports equaled 4% of U.S. production. USDA expects imports to hold steady at 4% of production through 2020.
USDA predicted hog prices will be higher this year and then again in 2012 and 2013. Unfortunately, they are also predicting corn prices will average above $4 per bushel for each of the next 10 years leaving hog producers near a breakeven situation in most years.
USDA's Thursday afternoon calculated pork cutout value was $90.39/cwt, down $1.28 from the previous Thursday. Loins and butts were lower this week. Hams and bellies were higher.
Hog prices ended the week steady to lower than the week before. The national weighted average carcass price for negotiated hogs Friday morning was $79.41/cwt, down $1.02 from the previous Friday. This morning western corn belt carcass prices averaged $76.57/cwt and Iowa-Minnesota averaged $76.60/cwt. This morning the eastern corn belt averaged $79.98/cwt. The top live hog price Friday at Zumbrota was $56/cwt. Both Sioux Falls and Peoria's top were $57/cwt. The interior Missouri live top Friday was $58/cwt, unchanged from the previous Friday.
The average carcass weight of barrows and gilts slaughtered the week ending February 19 was 205 pounds, down 1 pound from the previous week but 4 pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 274.2 pounds, up 1.1 pounds from the week before and up 5.0 pounds compared to a year earlier. Weights have been above year-ago for the last 23 weeks.
Hog slaughter totaled 2.14 million head this week, up 1.5% from the week before, but down 1.0% compared to the same week last year.
The April lean hog futures contract ended the week at $88.47/cwt, down $1.73 from the previous Friday.
The May contract ended the week at $98.22/cwt. June hogs settled at $101.05.
March corn futures closed out the week at $7.21 per bushel, up 9 cents from the week before. The May corn contract settled at $7.28/bu.