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Ron Plain

The December Hogs and Pigs report will be released on Monday, December 30th. Our estimate is for the breeding herd to be down 4%, market herd down 2%, and total herd to be down 2%.

We are hoping the breeding herd will be down enough to reduce the first half of the 2003 pig crop by 3%-4%. To do this, the productivity growth in the breeding herd will probably need to be quite low.

The probabilities are near 100% that we are past the big fall early winter hog marketings for sure after this week. Another reason why hog runs have been manageable this fall is that slaughter hog imports in October this year from Canada were 41,650 head smaller than in October of 1998. We believe the odds are high that the reduction of these slaughter hogs from Canada was larger in November and December than in October.

This week slaughter probably will be close to the largest week, if not the largest, for the fall and early winter. USDA estimates for this week under Federal Inspection is 2.156 thousand head - down 0.5% from a year earlier.

If this weeks slaughter does turn our to be the largest---and it did---for the last half of 2002, it will be the second consecutive year for the largest weekly slaughter for the last half of the year to be the week before Christmas week. The reason for this may be due to Christmas being in the week where the day before Christmas slaughter is quite low because many plants close early to give employees Christmas Eve evening off.

The good news this week was that pork exports --- even though smaller in October than a year earlier --- were still up 2.9% for January-October compared to 2001.

For October, pork exports to Japan, our largest customer, were down 27% --- because of the west coast dock labor problems --- but total pork exports for October were down less than 4%. Pork exports in October were larger to Canada, Mexico, and South Korea than last year.

As indicated earlier, our imports of live slaughter hogs in October were down nearly 22% this year from a year earlier and quite sharply from October of 1998. For January through October, slaughter hog imports from Canada were down nearly 8%. However, feeder pigs from Canada increased sharply in October from September of this year and were up nearly 1/3 from October of 2001. Feeder pig imports for January-October were up over 20% in 2002 from 2001.

Hog prices ended the week mixed from last week. Live prices were steady to $1.00 lower than 7 days earlier. Carcass prices were $0.11 - $0.96 lower than last Friday.

Live top prices on Friday morning for select markets were: Peoria $28.00, St. Paul $29.00, Sioux Falls $29.50, and interior Missouri $29.00. Average weighted carcass prices Friday morning for 185 pound carcass weight, 0.9-1.1 inches of back fat, 6 square inch loin, 2 inches deep were: Western Cornbelt $39.95, Eastern Cornbelt $41.51, Iowa-Minnesota $39.93, and Nation $40.35.

Merry Christmas!