Hog Price Roller-coaster

US Weekly Hog Outlook, 13th June 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
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There are substantial differences in the three daily hog price reports as a part of the mandatory price data. These three reports are all transactions before 9:30 AM, all transactions before 1:30 PM, and then the prior day report, which includes all transactions for the day.

The 1:30 PM price report averaged $0.36 per cwt higher for Iowa-Minnesota, $0.50 per cwt higher in Eastern Cornbelt, $0.36 per cwt higher in Western Cornbelt, and $0.36 per cwt higher in Nation than the 9:30 AM report. This means the actual price paid between 9:30 AM and 1:30 PM was higher than the above amounts because the pre-9:30 AM purchases are included in the 1:30 PM report. These differences are for carcass weight.

The prior day report prices were quite close to the 1:30 PM prices for this fifteen-month period.

There also were significant differences in hog prices by area. For example, the 1:30 PM prices were $0.66 per cwt higher in Iowa-Minnesota than the Eastern Cornbelt. The Iowa-Minnesota 1:30 PM prices were $0.03 per cwt lower than the Western Cornbelt and $0.25 per cwt higher than the average for the nation.

The bottom line for this data for producers is to try to get the base price for marketing contracts tied to the 1:30 PM report or prior day report and the area prices to strive for is Iowa-Minnesota or Western Cornbelt for the base price in a contract.

Cash hog prices moved higher in early week with top prices at some of the terminals at $48.50 per cwt live. However, in mid-week the price caravan ran into a speed bump and ended the week at steady to $1 lower compared to Friday a week earlier.

Top live prices at select markets on Friday were: Peoria $44, St. Paul $45, Sioux Falls was not available, and interior Missouri $43.50.

Average prices for 185 pound carcass Friday morning by area were: Western Cornbelt $64.18, Eastern Cornbelt $63.79, Iowa-Minnesota $63.87, and Nation $63.97.

Pork product prices moved higher in early week but these prices also weakened in late week. Loins with ¼ inch trim reached $139 per cwt in mid-week, but the Friday morning prices was $133 per cwt, up $3 per cwt from a week earlier. Boston butts with ¼ inch trim at $88.29 per cwt on Friday were up $3.29 per cwt from seven days earlier. Hams at $46 per cwt this Friday were up $0.50 and 12-14 pound bellies at $90 per cwt were down $10 from last Friday.
Slaughter this week under Federal Inspection was estimated at 1849 thousand head, up 2.3% from a year earlier.

Sow slaughter continues to run above a year earlier. For the four weeks ending 5-31-03, sow slaughter was up 7.6% when adjusted for herd size. Gilt slaughter has been up for the year compared to twelve months earlier for the first five months, but for the four weeks ending May 31st, gilt slaughter was down 0.4% from the same period in 2002.

Feeder pig prices this week at United Tel-o-Auction were mixed with three weeks earlier. Prices at United by weight groups were: 40-50 pounds $77.50-$78.50 per cwt, 50-60 pounds $78, 60-70 pounds $65, and 70-80 pounds $74.50.

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