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Better times are coming

by 5m Editor
8 March 2003, at 12:00am

US Weekly Hog Outlook, 7th March 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Ron Plain
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The average hog producer has lost money for 16 consecutive months and is in need of some encouraging news.

Better times are coming, but unfortunately, probably not in the next few weeks. Since December 1, hog slaughter has been 626,500 head (2.4%) above what was anticipated based on the market hog inventory in USDA's last quarterly survey. Year-to-date hog slaughter is running 2.3% above year-ago levels and shows no signs of an imminent decline. In the December hogs and pigs report, USDA predicted December-February U.S. farrowings would be 29,000 litters less than last year. In their January report, Statistics Canada forecast January-March Canadian farrowings would be 29,300 litters more than a year ago. Combined, we're looking at a very good chance that the winter North American pig crop is larger than the previous year's.

This implies that summer hog slaughter will be above year ago levels. Iowa barrow and gilt prices averaged under $37.50/cwt of live weight for June-August 2002. We need to do better than that this summer.

Looking farther out, things do look better. Sow slaughter has been consistently above year-earlier levels for 10 months. The gilt slaughter data shows reduced gilt retention for these same 10 months. USDA says the number of females bred has been below year-ago levels since June 2002. One should expect hog slaughter during the second half of 2003 to be 1-2% below year earlier levels. Slaughter in the first half of 2004 should be 3% below year-earlier levels.

Hog prices ended the week about where they started. Sioux Falls had a top of $35/cwt; St Paul topped at $34/cwt and Peoria had a top of $33.50/cwt on Friday. The interior Missouri market had a $32.50 top on Friday. The National weighted average carcass price Friday morning for negotiated hogs with 0.9-1.1" backfat, 6 sq. in. loins 2" deep was $45.18/cwt, $0.64 lower than last Friday. Regional prices on Friday morning were: eastern corn belt $44.32, western corn belt $45.81, and Iowa-Minnesota $45.26/cwt.

Pork product values were mixed this week with loins and butts a little lower and hams and bellies a bit higher. At mid-day on Friday, 1/4-inch trim loins weighing less than 21 pounds were trading at 90.75 cents per pound, down 2.7 for the week. Boston butts dropped 1.2 cents for the week to 53.38 cents per pound at midday on Friday. Ham prices were half a cent higher at 53 cents per pound for 17-20# hams. 12-14 pound pork bellies gained a penny to end the week at 82 cents per pound.

Federally inspected hog slaughter for this week is 1.907 million head, up 3.6% from the same week last year. Year-to-date slaughter is up 2.3%. Year-to-date sow slaughter is up 3.5%. Since the sow herd is smaller than last year, sow slaughter as a percent of the sow herd is up 7.3% compared to the same period in 2002. Weights are close to year ago levels.

USDA will release their next quarterly survey results on March 28. Look for USDA to revised the June-August 2002 pig crop upward by 2%.

5m Editor