Hog Production, Prices Turn South Seasonally

Just about everything in hog production is turning south seasonally.

Feeder pig prices, barrow and gilt prices and pork cutout value all appear to have peaked seasonally and will offer only brief bounces until they begin turning higher again in January, according to USDA Agricultural Marketing Service data compiled by the Livestock Marketing Information Center.




Perhaps the most important numbers for hog producers is the value of their product.  Weekly average carcass base price for barrows and gilts from Iowa and Southern Minnesota the last week of July was $82.62 per cwt, down $2.73, or 3.20%, from $85.35 the previous week and down $5.15, or 5.87%, from the peak of $87.77 the first week of July.

However, barrow and gilt prices remain above last year.  The latest weekly price was $14.49 per cwt, or 21.3%, above $68.13 the same week a year earlier, USDA/AMS data showed.

Still, butcher hog prices have held below the 2011-2015 average all year.  In the latest week, prices were $16.75 per cwt, or 16.86%, below the five-year average of $99.37.




Along with the topping out of barrow and gilt prices is a seasonal top in the pork cutout value.

It’s more difficult to say whether the pork cutout has topped for the year since the 2011-2015 average shows a second, even higher, top the second week of August.

So far this year, though, the 2017 pork cutout top came the second week of July at $104.83 per cwt.  The latest price of $100.78 was $4.05, or 3.86%, below the top.

The latest price also was $1.86, or 1.81%, below the 2011-2015 average for the same week of $102.64 per cwt.

However, the latest USDA/AMS price was $17.29, or 20.7%, above last year’s $83.49 per cwt for the same week.  Last year’s pork cutout value also saw a sudden, sharp decline at this time of year.

That summer drop-off was earlier than the previous five-year average.  Typically, this happens in late August and September.

A resurgence in the pork cutout takes place then as smokers begin buying uncured hams for late holiday orders.  The fall selloff takes place as orders for these “green” hams fades into the holidays where the end product shows up in grocery meat cases.

Feeder pig prices continue to decline.  These prices have a strong seasonal in them, and an annual bottom should take place in August, September or October.  At that point, it is likely they will begin a strong seasonal push that ends in February or March.




Widely scattered cash trades were reported Tuesday at $116 per cwt on a live basis in Nebraska, steady to down $1 from last week, with a few dressed-basis trades at $185, down $2 to $3.

Only one lot of 54 head with one- to nine-day delivery sold on the livestock exchange video auction last Wednesday, averaging $116.00 per cwt, down $1.68 from $117.68 the previous week.

Cash cattle trading was reported last week at $116 to $118 per cwt on a live basis, about steady.  Dressed-basis trades were reported steady to $1 lower at $187 to $188.

The USDA’s choice cutout Tuesday was down $0.47 per cwt at $202.25, while select was off $0.14 at $196.86.  The choice/select spread narrowed to $5.39 from $5.72 with 116 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $149.37 per cwt, down $0.40.  This compares with Wednesday’s Aug settlement at $146.02, down $0.22.