Iowa Farm Outlook & News

  • Sept. 2019 Hogs and Pigs:
       U.S.: All Hogs & Pigs Inventory: 77.678 million head, up 3.4% from last year
       U.S.: Breeding Herd Inventory: 6.431 million head, up 1.6% from last year
       U.S.: Market Hogs Inventory: 71.248 million head, up 3.5% from last year
       Iowa: All Hogs & Pigs Inventory: 24.900 million head, up 5.5% from last year
       Iowa: Breeding Herd Inventory: 1.010 million head, down 2.9% from last year
       Iowa: Market Hogs Inventory: 23.890 million head, up 5.9% from last year
  • Sept. 2019 WASDE:
       U.S. Corn Yield: 168.2 bushels per acre, down 1.2 bushels from last month
       U.S. Soybean Yield: 47.9 bushels per acre, down 0.6 bushels from last month
       2019/20 U.S. Corn Ending Stocks: 2.19 billion bushels, up 9 million from last month
       2019/20 U.S. Soybean Ending Stocks: 640 million bushels, down 115 million from last month
       2019/20 U.S. Corn Price: $3.60 per bushel, steady with last month
       2019/20 U.S. Soybean Price: $8.50 per bushel, up 10 cents from last month
Hogs (10/7/19)

In the first quarter of 2019, the Iowa-Minnesota (USDA Market News Report LM_HG204) producer sold total weighted average of all purchase types price was $59.74 per cwt (carcass basis), that was the lowest for any quarter since the final quarter of 2016 ($53.21). The second quarter averaged $78.56 per cwt, which was the highest since 2014's fourth quarter ($90.40). For the first week of October, this price series was below $60 per cwt. Early weaned pig prices (USDA-Iowa Dept. of Ag Market News Report NW_LS255) went on a counter-seasonal ride as the slaughter hog market surged in the spring and feedstuff costs were constrained. Formula and cash pig prices (10-12 pounds) were as low as $41.82 per head in mid-March, then started an upward climb peaking at $59.20 per head in mid-April. Since then, prices weakened to a low of $28.43 the last week of August before rebounding in September. Weaned pig prices averaged $39.04 per head for the first week of October, compared to $37.95 a year ago. Packer margins remain compressed, limiting short term demand for hogs at a time when supplies are expected to steadily increase, both in terms of pigs available and carcass weight. As calculated by the Livestock Marketing Information Center (LMIC), the hog packer gross margin (does not include packer processing costs, transportation, etc.), i.e., live-to-cutout spread, for 2019's second quarter was $30.64 per head. That was a decline of $2.93 from the same quarter a year ago and a drop of $17.67 per head compared to two years earlier. Third quarter comparisons were even more dramatic. For third quarter 2019 the margin was $31.51 per head, which compares $41.65 per head a year ago and $50.62 per head two years ago, decline of 24% and 38%, respectively.

The Markets Moved on Very Quickly from the Reports (9/17/19)

Here's a "Cliff Notes" version of the reports and the fallout. Corn and soybean yield estimated were reduced, based on smaller ear (corn) and pod (soybean) counts, especially in comparison to previous years. Corn exports and usage for ethanol stepped down as well. Advance export sales for corn are down roughly 40% from last year. Soybean usage was raised for last year's crop, but not for this year's crop. A looming issue is that advance soybean export sales are also down roughly 40% from last year. On the state yields, Iowa held firm on corn at 191 bushels per acre, but dropped a bushel on soybeans, to 54 bushels per acre. USDA found evidence to Continue further yield cuts in the eastern Corn Belt. USDA held its season-average price for corn at $3.60 and raised the soybean prices 10 cents, to $8.50. Looking forward, many in the trade expect additional reductions in the yield estimates with each monthly report. For corn, the historical pattern is to find fewer ears in each successive month For soybeans, USDA tends to find more pods each month, but grain weights generally fall.