Domestic demand for pork up slightly in 2002

US - US Weekly Hog Outlook, 31st January - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
calendar icon 1 February 2003
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Preliminary data makes it look like the domestic demand for pork was up very slightly in 2002 despite a new record in the per capita supply of red meat and poultry. Per capita consumption of pork in 2002 was about 51.3 pounds on a retail weight basis. This is 1.1 pounds more than in 2001. Given a larger per capita pork supply, one would expect retail pork prices to decline and they did. Last year's average retail price was $2.657/pound, down 3.7 cents from 2001. Adjusted for inflation, last year's average retail pork price was a bit higher than what might have been expected from a 2.2% increase in the per capita pork supply, thus demand appears to be steady to stronger.

This week's weather was much milder than the frigid arctic blast that covered much of the U.S. in mid January. As expected, warmer weather brought an increased willingness by producers to open their barns and sell hogs, which brought $1-2 lower hog prices. Peoria and Sioux Falls topped out at $35/cwt on Friday. St. Paul reported a practical top Friday of $34.50/cwt. The Interior Missouri market had a $33.25 top. The National weighted average carcass price Friday morning for negotiated hogs with 0.9-1.1" backfat, 6 sq. in. loins 2" deep was $45.83/cwt, $1.40 lower than last Friday. Regional prices on Friday morning were: eastern corn belt $45.23, western corn belt $46.23, and Iowa-Minnesota $46.25/cwt.

Cutout values were higher in response to last week's light kill. At mid-day on Friday, 1/4-inch trim loins weighing less than 21 pounds were trading at 96.43 cents per pound, up 5.434 for the week. The wholesale price of Boston butts gained 2.3 cents to 56.1 cents per pound. Pork bellies were up 4 cents from last Friday with 12-14 pound bellies ending the week at 78 cents per pound. Ham prices were a penny higher at 48 cents per pound for 17-20# hams.

Federally inspected hog slaughter for this week is 1.908 million head, up 3.6% from the same week last year. January hog slaughter was 1.5% more than last year. Based on the December pig report, it should have been down slightly and February and March slaughter should be even with last year.

Cold weather has an impact on growth rates. We started the year with barrow and gilt weights slightly above year-ago levels. It appears that slaughter weights are currently running slightly below year ago levels.

There were no big surprises in USDA's January hogs and pigs report. It indicates that December sow farrowed (905 thousand) was 2% smaller than last year. Pigs per litter in December (8.78) were up 1.4% from December 2001. This left the December pig crop (7.946 million head) down 0.6% compared to 12 months earlier. The sow and gilt inventory on January 1, 2003 was 3.11% smaller than a year earlier. In all, the report was a bit bearish in that pigs per litter and females bred were a bit higher than anticipated.

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