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Ron Plain

Demand is hot as a firecracker. Last month's hog prices were the highest for any February since 1997. Thus far in 2004, average daily hog slaughter is up 3.4% and pork production is up 4%. Despite all this extra pork, year-to-date hog prices are up a whopping 24% compared to the same weeks of 2003. More hogs and higher prices are a rare combination that should be savored; it won't last forever. Although, it looks likely to last well into spring.

Cash hog prices ended the week $1-4 higher than last Friday. Peoria topped out at $41/cwt on Friday, up a dollar from seven days earlier. Sioux Falls was $2 higher than last Friday with a top of $46/cwt and St Paul had a top of $43.50/cwt on Friday, up $1.50 for the week. Interior Missouri hogs had a $44.50 top on Friday. The National weighted average carcass price Friday morning for negotiated hogs with 0.9-1.1" backfat, 6 sq. in. loins 2" deep was $63.22/cwt, $3.60 higher than the previous Friday. Regional prices on Friday morning were: eastern corn belt $63.98, western corn belt $62.64, and Iowa-Minnesota $62.73/cwt. Iowa-Minnesota was $3.16 higher than the previous Friday.

The strong performance by hog prices came despite a more or less steady cutout value. At mid-day on Friday, 1/4-inch trim loins weighing less than 21 pounds were trading at $1.0986 per pound, up 3.86 cents for the week. Boston butts lost 6 cents for the week to 70 cents per pound at midday on Friday. Ham prices were 1.25 cents lower at 55 cents per pound on Friday for 17-20# hams. 14-16 pound pork bellies end this week like last week at $1 per pound. Hog prices are not likely to move, and could back down some next week, if cutout values don't improve.

Federally inspected hog slaughter for this week is estimated to be 1.962 million head, up 2.9% from the same week last year and above year-ago for the 17th time in the last 18 weeks. Sow slaughter in mid February was over 10% higher than a year ago. It is too soon to tell whether this is temporary or reflects a response to higher feed costs and the long period of red ink producers have been through.

Weights are up as usual. Last week's live barrow and gilt weights in Iowa-Minnesota averaged 265.9 pounds, 3.4 pounds more than a year ago. The weekly average carcass weight of barrows and gilts hasn't been below year-earlier since the week ending on December 7, 2002.

Despite expensive feed, feeder pig prices are showing their usual late winter strength. Cash prices for 10 pound SEW pigs averaged $26.18/head for pickup and $29.09 delivered according to USDA while 40-50 pound Missouri pigs brought $96.50/cwt this week.

The April lean hog futures contract ended today at $61.92, down a dime from last Friday. The May contract settled at $62.10 today, up 50 cents for the week. June closed the week at $67.40.