Hog Market
Cattle feedlot placements dropped sharply last month while March marketings increased leaving a big drop in the number of cattle on feed April 1, 2020. First quarter placements were the fewest since 2015 while marketings during the January/March period were the largest since the year 2000. Since some slaughter Read more…
Pork export sales (namely to China) remain brisk at the same time the closure of processing plants has tightened U.S. pork supplies. Processors need to find a way to reopen plants and take advantage of strong pork demand and plentiful live hog supplies. Perhaps an aggressive virus testing program will Read more…
We have scattered the Deliverable hog prices as a function of domestic per capita pork supply for the spring and summer period. The points for 2020 are based on the USDA’ April 2020 report forecast and current futures quotes. The spring contract is trading low on economic value while the Read more…
The USDA is scheduled to release the March Cattle On feed report on April 24. We estimate cattle placements last month at 1.95 million head compared to 2.01 million head in March 2019. Our marketing estimate for March is 1.85 million head compared 1.8 million head a year earlier. The Read more…
Feeder cattle are trading well below levels established in recent years. Feeder cattle are a residual claimant with bids based on the anticipated revenue from fat cattle and the cost of feed to finish cattle. Finished cattle have declined roughly 27% since the beginning of the current virus pandemic while Read more…
Deliverable hogs prices are at the recent five year low, but remain well above the all time low of $18/cwt in he 1995-2020 period. Large hog supplies and a leftward shift in domestic pork demand has pressured deliverable values. Seasonally cash hog prices have usually advanced from early spring into Read more…
Live cattle futures are trading at a sharp discount to what would be expected from 1) the USDA’s April beef supply estimates and 2) the beef supply – live price function established in the period of 2000 through 2019. The economic downturn because of the virus quarantine is the dominant Read more…
The USDA increased the 2020 pork production estimate again this month. Hog farms were more productive in the last half of 2019 and early 2020 than had been expected from the December Hogs and Pigs report. The March 2020 survey found hog numbers larger than anticipated. USDA cut the 2020 Read more…
Commercial hog slaughter in the second half of 2020 will total a record 69 million head assuming the March hogs and Pigs data and USDA’s March estimates. Ample hog supplies and strong pork export demand will likely keep the pork carcass cutout trading at a larger than normal premium to Read more…
USDA reported a four percent increase in US hog numbers on farms March 1. The hog industry was more productive in the second half of 2019 than had been reported in December. The second half of 2019 pig crop was revised up by two million head or three percent, a Read more…
Pork cutout values have shown exceptional strength through the recent economic turmoil. Strong export demand and seasonal factors in the domestic market have boosted pork prices. Also, pork consumption is home based more so than beef and broilers which depend more heavily on restaurant and fast food outlets.
Broiler production has increased sharply this year. Broiler type chick hatch increases in most years but has been given an extra boost by strong export demand. Broilers are the leading consumers of soybean meal. In effect the U.S. is exporting soybean meal in the form of broiler meat and pork. Read more…
The panic of 2020 has agricultural commodities trading low on the traditional economic value studies. The accompanying scatter plots the average feeder cattle price in the second quarter as a function the feeder cattle supply on January first. Currently futures are trading well below the regression line established from 2000 Read more…
This winter’s break in fat cattle prices could provide a buying opportunity in spring live cattle futures assuming this month’s beef supply/usage estimates from USDA. The accompanying scatter study plots the April/June average price for finished steers in the Midwest as a function of the per capita supply of beef Read more…
U.S. pork export sales have doubled this year to date with sales to China the principal destination. China’s swine herd was decimated by swine fever. China’s sow inventory is recovering but it will take some time for slaughter numbers to get back to normal. Increased hog numbers will require boosting Read more…
We estimate the March 1 hog inventory at 69 million head compared to 68 million head a year ago. Our estimate assumes the USDA December/February sows farrowing forecast published in December and a trend estimate for pigs per litter. The accompanying study shows the April/June average cash porkcut out as Read more…
There were 11.8 million head of cattle on feed February first, on the high side of recent history. The USDA has forecast a 2% year over year increase in U.S. beef production in 2020. Aggregating USDA’s production, trade and population data results in 21.3 pound per person domestic beef supply Read more…
The USDA has estimated the January 1 U.S. feeder supply outside feedlots at roughly 200 thousand head less than available a year ago. We have scattered the 1st quarter feeder price as a function of the January 1 feeder supply. The point marked in red is the price and supply Read more…
Last month the USDA forecast the first quarter domestic per capita beef supply at 19.5 pounds which is a slight increase from the previous year. The accompanying scatter study uses the per capita supply as barometer and average price of steers at Omaha as the dependent variable. In December USDA Read more…
The USDA estimated the market hog inventory December 1, 2019 at almost 71 million head compared to less than 69 million head at the same time a year ago. The number easily exceeded the trend established the previous 40 years. Pork export demand is at an all time high due Read more…