Hog Market
We calculate the July 1 cattle inventory at 109 million head which is about the same as the last two years.The USDA is scheduled to release the U.S. Cattle report on July 24, 2020. July through December commercial cattle slaughter will likely increase modestly compared to a year ago. Note Read more…
We estimate cattle on feed July 1 down about 2% from the previous year. The first scatter study plots third quarter beef production as a function of the number of cattle on feed July 1. Our second scatter plots the third quarter average Midwest steer price as a function of Read more…
The USDA estimated the U.S hog inventory on June 1 at almost 80 million head a record for the date. We have plotted the June hog inventory plus net live hog imports compared to the commercial hog slaughter in the following June/November period. Note the big increase in finished hog Read more…
USDA increased the 2020 U.S. beef production estimate this month after a sharp reduction in the WAOB May estimate. The beef industry has recovered more quickly the USDA had anticipated last spring. The accompanying scatter study displays the price of Midwest finished steers as a function of the July Read more…
The USDA has forecast an increase in pork production in 2021 compared to the artificially limited slaughter of 2020. Hog slaughter is making a steady increase compared to the dip in April and May when many plants were closed due Covid 19. USDA dropped the 2020 pork export estimate in Read more…
The USDA is scheduled to release the April Cattle of Feed data May 22, 2020. We estimate the on feed inventory at 11 million head which is down from 11.8 million head a year ago. Although fewer cattle were on hand the inventory likely is made up of a larger Read more…
The USDA cut the 2020 Pork production estimate this month the result of plant closures as finished hog supplies remain plentiful. Hog processing appears to have turned the corner suggesting USDA’s production cut for 2020 could prove overly pessimistic. The USDA has forecast a trend increase in pork Read more…
USDA cut the 2020 US beef production estimate through the summer because of processing plant closures. The chart shows the changes on an annual basis. In April and the first half of May beef production dropped roughly 20% because of plant closures. But the number of cattle being processed Read more…
Hog futures prices have been on the uptrend the past week as traders anticipate huge margins will induce the reopening of pork processing plants. Hog futures prices remain well behind the pork cutout value, but that gap will close rapidly with the resumption of processing work.
U.S. pork export sales remain strong with roughly two thirds of the year over year increase attributed to China. Export sales are squeezing out domestic consumers as about 40 percent of the pork processing capacity is closed due to the Covid 19 virus. There will be plenty of hogs Read more…
The urgency of getting beef packing plants back on line is illustrated by graphing packer margins over the past few months. The beef industry will become increasingly distorted if farmers and ranchers are not allowed access to now shuttered packing plants. Live cattle futures will get a lift when Read more…
Our calculations suggest a feeder cattle supply on April 1 of 20.2 million head compared to 19.7 million head a year ago. Historically the feeder cattle supply has proved a useful barometer of feeder prices in the May July period. The last August feeder quotes on Friday (4/24/20) were very Read more…
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…