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Ron Plain

We made our first effort this week to estimate the size of the breeding herd. If we use total sow slaughter including sows from Canada, we show the breeding herd down 2% on December 1 from a year earlier. However, if we reduce sow slaughter for this year by the number of increased sows from Canada as indicated by the weekly reports, the December 1 breeding herd would be down only about 0.5% from 12 months earlier.

We certainly hope the herd was at least 2% below a year earlier on December 1.

Demand for pork for January to October at the consumer level was down a little over 2% compared to 12 months earlier. However, demand for live hogs for these 10 months was up 2.4% from the same period in 2002.

In recent weeks pork production has been running about 5% above the same weeks last year and negotiated hog prices for the US on Thursday morning were over $3.00 per cwt of carcass above a year earlier. These values suggest at the current time demand for live hogs is 5 to 7% above a year earlier. We believe the probabilities are high that the demand at the consumer level at the current time is also above a year earlier.

I believe we are getting some demand assistance for pork at the current time from the very high beef prices.

Pork loin and Boston butts prices this Friday morning were down from last weeks; hams were higher. Hams are expected to weaken substantially in the next week or so because the holiday demand will be over.

Current slaughter rates, if continued through the remainder of the year, will result in slaughter for the 4th quarter of 2003 slightly above the large levels of the 4th quarter of 1998.

We have more slaughter capacity now than in late 1998.

Cash hog prices at the end of this week were mixed compared to a week earlier. Prices for live hogs at the terminal markets Friday morning for select markets were: Peoria $32.00, St. Paul $33.50, Sioux Falls $N/A, and interior Missouri $31.00.

Prices for 185 pound carcasses with 0.9-1.1 inch back fat, 6 square inch loin 2 inches deep weighted average by regions were: Western Cornbelt $N/A, Eastern Cornbelt $N/A, Iowa - Minnesota $N/A and Nation $N/A.

Slaughter this week under Federal Inspection was estimated at2120 thousand head --- up 4.4% from a year earlier.

The probabilities are very high that we have had the low in prices or 2003. Slaughter in coming weeks will likely decline some from the past few weeks. However, the last full week before Christmas is quite large some years.

Live barrow and gilt weights in Iowa and Minnesota for the week ending November 29th declined 0.5 pounds from a week earlier. Hopefully this is a sign that we have marketings quite current. These live weights for the above listed week was only 0.1 pounds above a year earlier.

Average barrow and gilt carcass weights for the week ending November 22 were still 2 pounds above a year earlier for Federally Inspected Hogs.