Large Stocks Of Pork May Spur Export Increase
USDA says there were 637 million pounds of pork in cold storage at the end of January. That is up 16.7 percent from the month before, up 6.9 percent from a year ago, and the most ever for January. Frozen beef stocks were also record high for January. At times, increases in stocks of frozen red meats have preceded increases in exports. Let’s hope that’s the case this time.
In what should be good news for domestic meat demand, the Commerce Department says that consumer spending increased 0.5 percent in January, the most for any month since May. The government revised their estimate of Gross Domestic Product growth during the fourth quarter of 2015 from an annual rate of 0.7 percent to 1.0 percent. For all of 2015 GDP grew at a rate of 2.3 percent.
Last year was the third consecutive year with stronger domestic demand for pork. Measured at the retail level, pork demand was up 4.2 percent. However, last year export demand for U.S. pork was down 11.8 percent compared to 2014.
After seven consecutive Fridays with higher prices, the national negotiated barrow and gilt price on the morning report today averaged $61.41/cwt, down 81 cents from last Friday morning. There were no regional negotiated price quotes this morning for the eastern corn belt, western corn belt, or Iowa-Minnesota.
The top price today at Peoria was $38/cwt, down $2 from last Friday. The top price for interior Missouri live hogs today was $44.25/cwt, up 75 cents from a week ago.
Friday morning’s pork cutout value was $74.28/cwt FOB the plants. That is down 19 cents from the week before, but up $4.30 from a year ago. Loin and belly prices were lower this week, but ham prices were a bit higher.
This morning’s national negotiated hog price was 82.7 percent of the cutout value.
This week’s hog slaughter was 2.211 million head, down 3.6 percent from last week and down 2.1 percent from the same week last year.
The average live slaughter weight of barrows and gilts in Iowa-Minnesota last week was 284.6 pounds, up 1.2 pounds from the week before and unchanged from a year ago. This is the first week since November in which Iowa-Minnesota slaughter weights have not been below the year-ago level.
The April hog futures contract ended the week at $70.85/cwt, up $1.95 from the week before. May hogs gained $1.65 this week to close at $76.925/cwt. The June lean hog futures contract ended the week at $80.85/cwt, up $1.70 from the preceding week. July hogs closed at $80.475/cwt.
The March corn futures contract settled at $3.545 per bushel today. That is down 11 cents from last Friday. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri