Agribusiness Weekly Update: Hog slaughter and prices escalate

Beef
Beef packers lost about $27 per head processed last week and the red ink continues to flow, according to Hedgers Edge. Calf prices in Oklahoma jumped as much as $10 per hundredweight last week with stronger stocker demand and limited supplies both contributing factors. Feeder cattle auction volumes are down 26% over the last six weeks compared to last year. The weekly preliminary data for September indicates that Mexican cattle imports will be down even more sharply than in recent months. Mexican cattle imports in 2013 are expected to be sharply lower than recent years, according to Darrell Peel, livestock marketing specialist at Oklahoma State University.

Hogs & Pork
Hog processors profited about $5.50 per head last week, packer margins were about the same through Tuesday (Oct. 16), according to Hedgers Edge. The national average negotiated carcass price for direct delivered hogs on Oct. 12 was $81.46 per hundredweight, rising $17.91 in the past month. Hog slaughter last week totaled 2.396 million head, up 3.4% compared to the same week last year, according to USDA.

Chicken
Chicken processors are seeing very tight margins as corn and soybean meal prices remain high. Broiler chicks placed for meat production in Arkansas were 18.7 million during the week ending Oct. 6  Placements were up slightly from the comparable week in 2011. Egg sets were up 5% last week from the same period last year, according to USDA. Whole chicken prices averaged 96 cents per pound to start this week, up 7.6% from a year ago. Boneless breast prices are at $1.64 per pound, while leg quarter prices are 54 cents per pound wholesale, according to Georgia Dock prices this week.

Table Eggs
Large egg prices in Arkansas ranged from $1.15 to $1.23 last week, up 9 cents from last year. Table egg inventory rose 2% from a year ago with 1.153 million (30 dozen cases) processed, according to the USDA report.

Grains
Cash corn prices traded Monday (Oct.15) at $8.22 per bushel, rising 22% from a year ago. The December corn futures closed at $7.52 per bushel down 20 cents on Monday, according to the Arkansas Farm Bureau. Corn was pushed lower on declining demand. Supplies are tightening but no doubt southern hemisphere plantings will expand and help ease the tight supply situation, according to Arkansas Farm Bureau.

Cash soybean prices closed Monday (Oct. 15) at $14.85 per bushel. The November contract started lower this week at $15.23 to close Monday, while January beans closed at $15.22, down 26 cents. Bigger crops are projected for South America with Brazil becoming the largest producer in the world. Growing demand in China, if it continues, would keep world stocks tight and limit downside market pressures. November 2013 remains in a consolidation pattern with support around $13.05, according to Arkansas Farm Bureau.

Dairy
Butter prices received for 25 kilogram and 68 pound boxes meeting USDA Grade AA standards averaged $1.91 per pound for the week ending Oct. 6, up 2.9 cents from the previous week. Cheddar Cheese prices received for U.S. 40 pound blocks averaged $1.96 per pound, rising 6.8 cents from the previous week. Nonfat Dry Milk prices meeting USDA Extra Grade standards averaged $1.44 per pound, flat with the prior week.

Ethanol
Cash ethanol prices traded at a $2.39 per gallon last week, down from $2.65 per gallon a year ago, according to USDA. Ethanol was priced at a $1.40 per gallon discount to gasoline as of Oct. 12.