Mostly negative news this week for the pork complex

US Weekly Hog Outlook, 22nd August 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
calendar icon 23 August 2003
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Ron Plain
Ron Plain

The cold storage stocks of pork at the end of July continue to be positive compared to last year. Total pork stocks were down 5 percent from the end of June and down 8 percent from the end of July 2002.

Most of the news this week for the pork complex was negative. Even though slaughter this week is down from a year earlier, cash prices have been lower about every day this week.

Top live prices this Friday morning were $3.00 to $4.50 lower than a week earlier. These prices this Friday were: Peoria $35.00, St. Paul $35.00, Sioux Falls N/A and interior Missouri $34.75. The average prices for a 185-pound carcass with 0.9-1.1-inch back fat, 6-square-inch loin, 2-inches deep were down $4.18 to $4.65 this Friday morning compared to a week earlier. These prices by geographic area were: western Cornbelt $52.08, eastern Cornbelt $53.08, Iowa-Minnesota $52.10 and nation $52.47.

Slaughter this week under Federal Inspection was down from the high slaughter last week and from this week last year, but it was still quite large for August at 1887 thousand head. This number was down 4.1 percent from last week and down 4.1 percent from the same week in 2002.

There are some market observers who believe hog marketings have been pulled forward by faster rates of gain due to the relatively cool weather we have enjoyed prior to this week. However, average slaughter weights would not support this hypothesis. For the week ending August 16, average barrow and gilt weights in Iowa and Minnesota were 3.9 pounds per head above last year. This means we are about 2.5 marketing days less current than we were at this time last year or around 900,000 head. Average carcass weights for barrows and gilts for the week ending August 2 were 2 pounds heavier than last year or probably 2 days or a little less current with marketings than last year. These weights would not support marketings being pulled forward very much, if any, by mid-August due to good weather for rates of gain.

Also, a bit of good news for the pork industry this week is that Swift packing company is expanding the size of their Louisville plant by 1,500-2,000 head per day. The additional cooler space will allow the plant to kill up to 10,000 head per day.

Pork product prices this Friday were mixed as to last week. Loins with 1/4-inch trim at $105.00 per cwt were down $2.00 per cwt, Boston butts with 1/4-inch trim at $66.00 per cwt were down $11.00 per cwt, 17-20-pound hams at $54.00 per cwt were up $3.50 per cwt, and 12-14-pound bellies at $80.00 per cwt were steady compared to last week.

Pork exports for January-June this year are up 5.2 percent from 12 months earlier. Our sales to Japan were up 8.5 percent, up 79 percent to South Korea and up 42 percent to other; but down 17 percent to Canada and down 10 percent to Mexico.

Pork exports were also up by 19 percent for the first 6 months of 2003 compared to the same period in 2002. Our imports from Canada were up almost 18 percent and up over 30 percent from Denmark. Over 80 percent of our imports came from Canada and another 14 percent came from Denmark.

Demand for pork as reflected by wholesale prices continues to be disappointing. This is of special concern with beef demand and prices both very strong.

All of the pigs in the United Tel-o-auction this week sold direct from farm to farm, so it is difficult to get a good comparison with two weeks ago.

Prices by weight groups at United were: 40-50# $50.00 per cwt, 60-70# $57.50 and 70-80# $48.00. These prices are down substantially from 2-3 months ago but sill roughly double in price compared to this date last year.

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