Hog net returns have remained in the red in recent months. Calculations by the Economics Department at Iowa State University estimate the typical Iowa farrow-to-finish hog marketed during March lost $3.82. That was the seventh consecutive month with red ink. On the positive side, March losses were the smallest in that seven-month string. There have only been two profitable months in the last 17.

Thanks largely to lower corn prices, the cost of raising hogs has declined during each of the last 11 months. Iowa State University economists calculated the breakeven carcass price for hogs marketed during March at $87.80/cwt, the lowest since February 2022. If the futures market is close to right, hogs will be profitable through August.

Plain

USDA’s Foreign Ag Service is predicting a 2.9% increase in 2024 U.S. pork production, but a 0.6% decline in world pork production compared to last year. The world decline is due to an expected 3.4% decline in Chinese production. Despite the reduction in Chinese pork production, USDA expects Chinese pork imports to be down 1.1%. Rather than expecting China to import more pork to cover the production shortfall, USDA is predicting a 3.4% decline in Chinese pork consumption.

World pork exports are expected to be up 4.4% this year with U.S. exports up 7.7%. The U.S. is expected to pass the European Union to become the world’s largest pork exporter. Brazil ranks third and Canada fourth. Mexico is the leading foreign buyer of U.S. pork. Mexico’s pork imports are expected to be up 8.9% this year. 

U.S. pork imports are expected to be down 0.7% compared to 2023. 

U.S. pork exports during January and February were up 11.4% year-over-year. Mexico, South Korea, Australia and Colombia had sizeable increases in purchases of U.S. pork. Shipments to China were down a whopping 43.2%. Export demand for U.S. pork has been up for the last few months.

During the first two months of 2024, U.S. pork imports were up 4.1% with Brazil, Denmark, Italy, Netherlands and Spain each shipping more to the U.S. Shipments from Canada were down 6.4%.

Plain

The average U.S. retail price of pork rose to $4.793 per pound during March. That was up 3.2 cents from the month before and up 3.7 cents from a year ago. The year-over-year price increase was 16.6 cents short of the rate of inflation. Domestic pork demand has been weak for the last two years. The farmer’s share of the consumers’ pork dollar was 21.7% during March, the highest month since August.

Plain

The average price for 51-52% lean market hogs was $59.84/cwt during March, the highest month since September. March hog prices were up $4.60 from the month before and up $3.46 from a year ago. As the chart shows, thus far in 2024 hog prices have moved steadily higher and are currently above both last year and the five-year average.

Plain

During the last seven weeks federally inspected hog slaughter has been down 0.1% compared to the same period last year. That is a slightly smaller reduction than the 0.6% decline predicted by USDA’s March Hogs and Pigs report. If USDA’s March hog inventory numbers are correct, hog slaughter should be up 1-2% for most of what’s left of 2024.

Plain

Year-to-date sow slaughter is up 3.1%, but barrow and gilt slaughter is only 0.4% higher than last year. The March breeding herd was down 2.1% year-over-year. The high sow slaughter may be an indication that the breeding herd is continuing to decline.

Plain

Corn prices have dropped $2 per bushel in the last 12 months. Corn futures contracts for the rest of 2024 are currently trading between $4.30 and $4.70 per bushel. USDA is pegging the average corn price for the current marketing year at $4.70 per bushel. That is $1.84 lower than for the 2022-23 marketing year.

Plain

Barrow and gilt carcass weights averaged 211 pounds last year. Although the long-term trend is to heavier weights, the average hog dressed weight was down three pounds last year and is a pound lower thus far in 2024. The combination of high feed prices and low hog prices is the likely cause for the lighter-than-expected slaughter weights.

Plain

USDA is forecasting the average cash price for 51-52% lean hogs in 2024 at $63/cwt. That is $4.41 higher than last year but $8.21 lower than in 2022.

Lean hog futures contracts for 2024 are currently trading from $96/cwt (May) to $106/cwt (July) to $77/cwt (December).

USDA is forecasting this year’s pork production will be up 2.9% and hog prices will be up 7.5% compared to 2023. That is both more pork and higher hog prices than last year. That is a combination that is a bit more optimistic than my opinion.

USDA will release the Cold Storage report for the end of March on Wednesday of this week. Livestock Slaughter for March comes out on Thursday.