Hog prices mixed, Continued herd contraction likely

US Weekly Hog Outlook, 18th April 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
calendar icon 19 April 2003
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Ron Plain
Ron Plain

Cash hog prices were a little weaker this week than at the end of last week. Top live prices this Friday morning were from steady to $2 per cwt lower compared to last Friday. Prices for select markets were: Peoria $31, St. Paul $ N/A, Sioux City $ N/A and interior Missouri $32.50.

Average prices for 185 pound carcasses with 0.9 inch to 1.1 inch back fat, 6 square inch loin 2 inches deep by area for Friday morning were: western Cornbelt $45.35, eastern Cornbelt, $45.40, Iowa-Minnesota $45.15 and nation $45.40.

Pork product prices were mixed for the week. Loins at $101 per cwt were up $6 per cwt, Boston butts at $63 per cwt were up $6.78 per cwt, 17-20 pound hams at $42 per cwt were down $1 per cwt, and 12-14 pound bellies at $78 per cwt were down $9 per cwt from last Friday morning.

Slaughter this week at 1888 thousand head continues to run some above expectations.

On a weekly basis, slaughter for 2003 through week ending April 5 is up a short 2 percent from 2002.

USDA is now forecasting production of beef, pork and broilers in 2003 to be down from a year earlier. If this comes true, it will be the first year since 1973 for all 3 types of meat production to be below a year earlier. Hopefully these smaller supplies of meat will result in higher prices for all classes of live animals as we move through the year.

Pork exports for January and February this year were up almost 4 percent. For only February, pork exports were up 7.6 percent. With the large production of pork---even though down for the year compared to last year's record production---this kind of export growth continuing through the year will be helpful to hog prices.

Pork imports continued the trend in January with a growth for the 2 months of 21 percent from last year. Our purchases of pork from Canada in January and February were up 19 percent and from Denmark, up 34.4 percent from a year earlier.

Live hog imports for the first 2 months of 2003 were down 0.2 percent from 12 months earlier. Feeder pig imports continued to grow with a gain of almost 13 percent, but slaughter hog imports were down over 22 percent. The larger number of hogs being slaughtered in Canada is probably the main reason for the substantial increase in pork imports from that country. This is one of the potential downside impacts of the country of origin labeling of meat in the US to be mandatory in 2004. We will end up with the pork from feeder pigs from Canada that are being fed and slaughtered in the US and the slaughter hogs from Canada that will all be slaughtered in Canada. Country of origin labeling probably will not reduce competition any from Canada.

Both gilt and sow slaughter data continue to support the belief that producers are continuing to reduce the breeding herd. Sow slaughter for the 4 weeks ending April 5 was up only 10 percent and up 8 percent for the year ending April 5 after adjusting for herd size. Gilt slaughter for the year ending April 5 was up 1.9 percent from 2002.

Feeder pig prices at United Tel-o-auction this week were $10-15 per cwt below 2 weeks earlier. The prices by weight groups were: 40-50# 94.50 per cwt, 50-60# $69-81, 60-70# no pigs, 70-80# $54.50-78.

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