Hog Slaughter Delivers Expectations

US Weekly Hog Outlook, 5th September 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
calendar icon 6 September 2003
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Ron Plain
Ron Plain

We finally have hog slaughter where we expected relative to last year. Slaughter for the past 3 weeks has been down 5.4 percent from a year earlier based on preliminary data.

Live weights for the week ending August 30 in Iowa-Minnesota were down 2.2 pounds per head from a week earlier and only 0.2 pounds per head above a year earlier. Carcass weights for the week ending August 23 were still 2 pounds per head above a year earlier.

We believe the reduction in weights for the week ending August 30 was due to the hot weather over the western Cornbelt in late August.

We believe the probabilities are near 100 percent that producers pulled marketings forward in mid-August in order to price hogs under the futures market contract. These hogs had to be marketed by mid-August to get the August basis.

Note in the table below that the number of hogs marketed for the week ending August 16 was 39,434 head above the average for the prior 2 weeks. This 39,434-head amounted to 2 percent of the Federally Inspected slaughter for the week ending August 16.

Number of Hogs Marketed by Week
Using the Futures Market Contract
Week Ending Number of Head
August 2 185,329
August 9 173,657
August 16 218,927
August 23 138,777
August 30 144,925

The average number of hogs for the 2 weeks ending August 30 was 37,642 head below the week ending August 16.

If we could measure as accurately the possible early marketings during late June, July and early August due to higher rates of gain during this period, due to cooler than normal weather, especially in the western Cornbelt; we could do a much more accurate job of estimating marketings during the next several weeks.

We hope we have pulled marketings forward substantially relative to last year because of this cooler weather. We doubt we have, though, especially compared to last year when we did pull marketings forward based on weights because of the fear of very low hog prices in the fourth quarter.

Even with the smaller slaughter of this week, pork product prices were mixed with some up a little and some down at noon today compared to last Friday. Loins with 1/4-inch trim at $102.56 per cwt were down $2.44 from a week earlier. Boston butts with 1/4-inch trim at $60.26 per cwt were up $2.26 per cwt, 17-20-pound hams at $57 per cwt were same as last week per cwt and 12-14-pound bellies at $80 per cwt were up $0.50 per cwt from 7 days earlier.

Cash hog prices this Friday morning were from 2-4 higher compared to a week earlier. Top live prices this Friday for select markets were: Peoria $34 per cwt, St. Paul $34, Sioux Falls $35 and interior Missouri $32.50.

Average carcass prices for 185-pound carcasses with 0.9-1.1-inch back fat, 6-sqare-inch loins 2 inches deep by area were down $0.62 up to $1.92 compared to Friday morning last week. These prices were: western Cornbelt $48.97, eastern Cornbelt $49.25, Iowa-Minnesota $49.01 and nation $48.97.

Slaughter this week under Federal Inspection was estimated at 1741 thousand head---down 5.7 percent from a year earlier.

Feeder pig prices this week at United Tel-o-auction were mixed but probably on average some better this week than two weeks earlier. These prices by weight groups were: 40-50# $39.50-56.00 per cwt, 50-60# $48.50-49.00, 60-70# $37.50, 70-80# $43.00-47.00, and 80# plus $37.50.

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