Cash hog prices ended the week mixed

US Weekly Hog Outlook, 19th December 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.
calendar icon 20 December 2003
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Ron Plain
Ron Plain

Cash hog prices ended the week mixed compared to a week earlier. The live prices this Friday morning were $1 higher to 2 lower per cwt compared to 7 days earlier. Top live prices this Friday morning for select markets were: Peoria $33 per cwt, St. Paul $33, Sioux Falls $34, and interior Missouri $31.

Average prices for 185-pound carcasses in the negotiated trade on Friday morning by areas were $0.90 higher to $1.88 lower compared to a week earlier. The average price for a 185-pound carcass with 0.9-1.0-inch back fat, 6-square-inch loin 2 inches deep were: western Cornbelt $46.26, eastern Cornbelt $47.09, Iowa-Minnesota $46.08 and nation $46.69.

Pork product prices were also mixed this Friday at noon compared to a week earlier. Loins were $4.64 per cwt higher at $96.89 per cwt, Boston butts were $4.71 per cwt lower at $56.29 per cwt, 17-20-pound hams were $6.15 per cwt lower at $40.85 per cwt and 12-14-pound bellies were not quoted last week. 14-16-pound bellies this Friday at noon were $81 per cwt.

Hog slaughter this week under Federal Inspection was estimated at 2225 thousand head---up 2.2 percent from a year earlier and the largest weekly slaughter for 2003.

The average weight of barrows and gilts in Iowa-Minnesota for the week ending December 6 was below a year earlier. However, based on average carcass weights under Federal Inspection for barrows and gilts that were 2 pounds above 12 months earlier that week. Therefore, the average live weights for Iowa and Minnesota, which are taken by a sample, were incorrect.

Average live weights for the week ending December 13 at Iowa-Minnesota were up sharply from a week earlier and a year earlier at 268.1 pounds for barrows and gilts. The weights for the week ending December 13 were the heaviest of this year. This is normal for hogs to be the heaviest of the year in December. In 2002, the heaviest average weights occurred the week ending December 7.

This data supports the belief that the large marketings of recent weeks are not due to pulling marketings forward.

Our estimate for the December 1 U.S. hog herd is: all hogs at 102 percent of a year earlier, breeding herd at 99 percent of last year, and market herd at 102 percent of the same date in 2002.

Retail pork prices were up $0.017 per cwt in November compared to October. However, prices for the 11 months ending in November were 0.2 percent below a year earlier.

The good news is that retail pork prices in November were a little over 5 percent above November of 2002 even with pork production up substantially. Commercial pork production in November of 2003 was up about 0.4 percent even with one less weekday slaughter in November of 2003 than 2002. On a daily basis, pork production was up between 4 and 5 percent in 2003 compared to 12 months earlier.

The record high beef prices are no doubt at least partially the reason for the stronger pork prices.

Live hog prices for January-November were up over 13 percent from a year earlier. All of the increase in live hog prices for these 11 months came from squeezed marketing margins because retail prices for this period were slightly below a year earlier.

Hog slaughter in coming weeks is expected to decline from recent weeks and hog prices are expected to strengthen some unless marketings are even larger than we expect.

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