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Ron Plain

Federally inspected hog slaughter for this week is 1.915 million head, up 2.8% from the same week last year. December hog slaughter was 2.4% greater than anticipated based on USDA's December 1 hog inventory survey. January hog slaughter was 2.0% above USDA's implied forecast and it looks like February slaughter may come in 2.5% higher than expected.

Part of the overrun in slaughter is due to increased female slaughter. Since December 1, sow slaughter has averaged 7% higher than a year earlier and our gilt slaughter data indicates fewer gilts are being retained for breeding.

It certainly does not appear that increased imports of slaughter hogs from Canada is causing the higher than expected slaughter totals. The number of slaughter hogs being imported from Canada has been running below year-ago levels. Importation of Canadian feeder pigs is up, but these animals should have been included in the December 1 market hog inventory.

Based on preliminary data, it looks like the U.S. imported a record 5.98 million hogs and pigs from Canada last year. Of these, 3.95 million were feeder pigs. Last year's imports from Canada included 780,000 more feeder pigs, but 130,000 fewer non-feeder pigs than in 2001.

The steady overrun in hog slaughter has slowly eroded the prospects of live hog prices close to $50/cwt this summer. The June lean hog contract ended the week at $61.40/cwt. That is equivalent to a live price of $45.44/cwt. The February contracted ended the week at $48.67, April settled at $52.45 and May ended at $58.45

Live hog prices at the terminals ended the week $1-2 higher than at the previous Friday. Plant delivered prices were slightly higher in the west but lower in the east. St Paul and Sioux Falls topped out at $34/cwt on Friday. Peoria reported a practical top Friday of $33.25/cwt as did the interior Missouri market. The National weighted average carcass price Friday morning for negotiated hogs with 0.9-1.1" backfat, 6 sq. in. loins 2" deep was $46.11/cwt, $0.45 lower than last Friday. Regional prices on Friday morning were: eastern corn belt $46.01, western corn belt $46.17, and Iowa-Minnesota $46.08/cwt.

Pork product values were unevenly higher for the week. At mid-day on Friday, 1/4-inch trim loins weighing less than 21 pounds were trading at $1.0057 per pound, up 6.57? for the week. Pork bellies gained two cents from last Friday with 12-14 pound bellies ending the week at 80 cents per pound. The wholesale price of Boston butts held steady at 58 cents per pound. Ham prices, however, were a penny lower at 46 cents per pound for 17-20# hams.