Market Hog Prices Drop With Cutout

Weekly average butcher hog prices continue to drop as pork cutout prices exert seasonal pressure.  However, hog slaughter and dressed weights are only a little above last year and the 2011-2015 averages.

Data from the USDA’s Agricultural Marketing Service that was compiled by the Livestock Marketing Information Center shows barrow and gilt prices falling away after hitting their seasonal high of $87.77 per cwt during the first week of July.

The latest weekly average barrow and gilt price of $60.91 per cwt was $1.99, or 3.38%, above the 2016 price of $58.92 but $19.98, or 24.70%, below the 2010-2015 average of $80.89.  And if the trend holds, prices will continue to fall for the rest of the year.

An early December push to higher prices is possible as demand for hams steps up for the holidays, but by early December even this demand is gone as the curers do not have time to process “green,” or uncured, hams in time for the Christmas holiday.

 

WEEKLY SLAUGHTER UP

 

Weekly hog slaughter, at 2.170 million head in the latest week, is 84,000 head, or 4.03%, above last year’s 2.086 million and 190,000, or 9.60%, above the 2011-2015 average of 1.980 million.  However, this does not seem to be enough to pressure prices as much as they have.  Nor does it seem to be enough to pressure prices away from the five-year average as much as it has.

Supply side price pressure appears to be an accumulated point rather than a sudden increase.  Barrow and gilt slaughter last year was above the previous five-year average in every week.  This year, too, market hog slaughter has been above last year in all but the first week of the year.

The trend in weekly hog slaughter numbers is for kill rates to rise unevenly until one of the two weeks after the Thanksgiving Day holiday and then drop off sharply into the end of the year.  No one has proposed any change to the seasonal trend for this year.

 

CONSUMPTION CALLED ABOUT STEADY

 

The USDA’s World Outlook Board Tuesday projected US per capita pork consumption at 50.3 pounds for the year, up from the August estimate of 50.2 pounds and last year’s 50.1 pounds.  Not much of a change.

Pork imports also were forecast to be up from last year at 1.095 billion pounds, unchanged from the August report, but up 4,000 pounds, or 0.37%, from 2016’s 1.091 billion.  This isn’t much, but given the increased domestic production, it might be considered surprising that there is any increase at all.

The savior, if there is any, is pork exports, which were projected at 5.753 billion pounds, unchanged from the August report but up 514,000, or 9.81%, from the 5.239 million recorded for 2016.

It seems beef might have its work cut out to compete.

 

CATTLE, BEEF RECAP

 

Only one lot of cattle sold Wednesday on the Livestock Exchange video auction at $104.75 per cwt.

Grudging cash trading was reported last week at $105 per cwt on a live basis, steady to up $1 from the previous week and at $163 dressed, down $2 to $3.

The USDA’s choice cutout Wednesday was down $0.39 per cwt at $190.40, while select was off $2.17 at $188.69.  The choice/select spread widened to $1.71 from $0.07 with 111 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $149.02 per cwt, up $0.05.  This compares with Wednesday’s Sep settlement of $148.60, up $0.62.