Hog Markets: Review And 2019 Outlook

Pork production this year could be up from last year, but critical export markets still are up to the whims of government policy, rendering price forecasts difficult at best.

The Livestock Marketing Information Center said in a market situation and analysis that there were fewer lightweight pigs reported than expected in the Dec. 20 Quarterly Hogs and Pigs report from the USDA’s National Agricultural Statistics Service.  The number of animals weighing less than 50 pounds was only 0.9% more than a year earlier.

As of Dec. 1, the number of market hogs increased 1.9% year-over-year, the Hogs and Pigs report said.  December-February farrowing intentions were 2.5% more than a year earlier, and producers reported they intend to farrow 1.5% more sows during March-May of 2019 than in 2018.




Frozen pork tonnage in commercial facilities on Nov. 31 was significantly less than expected, the LMIC said.  Even though US pork production has been substantial, frozen stocks only increased by 1.0% compared with a year earlier

For 2018, the LMIC recently projected US commercial hog slaughter at 124.4 million head, a year-over-year increase of 2.5%.  Annual average carcass weight increased only 0.2%.

At 26.3 billion pounds, 2018 commercial pork production was record large and increased 2.9% compared with 2017.

The LMIC projected (actual data were available for January-October) that 2018 pork export tonnage was about 5.9 billion pounds carcass weight equivalent, which excluded variety meats.  This would be an all-time high.

US per capita disappearance was estimated by the LMIC to be 50.7 pounds on a retail weight basis, up less than one pound from 2017 and the largest since 2007.

The national base barrow and gilt carcass price for 2018 was just below $64.50 per cwt (slipping 8% from a year earlier), which was the lowest since 2016’s.




This year, the LMIC forecast is for US pork production to increase year-over-year, reaching about 26.9 billion pounds.  This would be a year-over-year increase of 2% to 3%.

US pork export tonnage (not including variety meats) was forecast to be near 6.1 billion pounds.  However, the LMIC said this number could be significantly higher or lower depending largely on sales to China and Mexico.

Per capita pork disappearance (retail weight) this year may be unchanged compared with 2018, the LMIC said.  The LMIC’s current forecast is about 50.9 pounds.

The LMIC suggested that for the full year hog prices will be close to 2018’s.

On a quarterly basis, prices this year may show a bit more seasonality than occurred in 2018, the LMIC said.  The first quarter price could be below 2018 (down about 7%).

The second and third quarters could bring hog prices above 2018’s by 2% to 5%, while the fourth quarter may show little year-over-year change.




Cash cattle traded last week at $123 to mostly $124 per cwt on a live basis, up $1 from the previous week and at $195 to mostly $197 on a dressed basis, up $1 to $2.

The USDA choice cutout Tuesday was up $0.19 per cwt at $212.21, while select was up $0.41 at $205.87.  The choice/select spread narrowed to $6.34 from $6.56 with 148 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Monday, was $144.44 per cwt, down $0.21.  This compares with Tuesday’s Jan settlement of $144.75, down $0.10.