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Hog price spring rally stumbles a bit

by 5m Editor
27 March 2004, at 12:00am

US Weekly Hog Outlook, 26th March 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Hog industry observers estimated the March 1 hog breeding herd at near 99% of 2003. The total herd estimate is some below 102% and market herd at near 102% of 12 months earlier. These estimates are very close to our estimate.

Sow slaughter for the weeks ending March 13 was still up but only about half as much as for the 4 weeks ending March 6. Sow slaughter for the week ending March 13 was up 9.4% after adjusting for breeding herd size. For the 4 weeks ending March 13, sow slaughter was up nearly 17% from a year earlier. Gilt slaughter for this month period was also up from a year earlier.

To reduce the breeding very much will require gilt and sow slaughter to stay above a year earlier several months.

Hog prices stumbled a bit this week in their spring rally. Terminal market prices were steady to $1 per cwt lower compared to a week earlier on Friday morning. The carcass prices for 185# carcass with 0.9-1.1 inch back fat 6 sq.-inch loin 2 inches deep were $0.58 lower to $0.68 higher pr cwt compared to 7 days earlier on Friday morning. The carcass prices weighted average by area were: western Cornbelt $64.78, eastern Cornbelt $66.51, Iowa-Minnesota $64.72, and nation $65.36 per cwt.

The terminal market top cash prices per cwt for select markets were: Peoria $44.00, St. Paul $46.50, Sioux Falls $47.00 and interior Missouri $46.50.

Pork product prices this Friday were mixed compared to a week earlier. Loins with quarter inch trim at $108.00 per cwt were $7.00 per cwt lower than last Friday. However Boston butts at $83.50 per cwt were up $6.50 per cwt, 14-16# bellies were not quoted last week, but this Friday there were at $110.00 per cwt which was probably up $4-6 per cwt and 17-20# hams at $53.00 per cwt this Friday were down $2.00 per cwt from 7 days earlier.

Cold storage stocks of pork on February 29 were down 7% from a year earlier. Belly stocks at the end of February were up 49% from last year, however last year stocks were quite low. This year belly stocks for the last day of February were very close to the stocks on the same date in 2002.

This year pork cold storage stocks at the end of February were positive for prices of pork and hogs.

Hog slaughter for the 4 weeks ending March 27 have been up a little less than 2% under Federal Inspection. But, if non-Federally Inspected hog slaughter has been down as much in March as in January and February compared to a year earlier. Total slaughter may has been up a little less.

Slaughter this week under Federal Inspection was estimated at 1921 thousand head --- up 0.5% from a year earlier.

The Hogs and Pigs Report came in as expected. The breeding herd was down 1%, the market herd up 2% and total herd up 2% from a year earlier.

The supply of pork will likely continue to run well above a year earlier for both the second and third quarter. Fourth quarter slaughter is likely to be as large or larger than a year earlier if we continue to get live hog imports running as much above a year earlier levels as recent months.

We are hoping the live hog imports from Canada in the last half of the year will be relatively close to a year earlier.

A more detailed summary of the report will be avaialble noon, Monday the 29th.

5m Editor