Pork production set a new monthly high in March this year

by 5m Editor
1 May 2004, at 12:00am

US Weekly Hog Outlook, 30th April 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Ron Plain
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The number of hogs killed was 11 percent above 2003 as well as pork production at 1.8 billion pounds was 11 percent above a year earlier.

A significant portion of this increased slaughter and production in March this year from 2003 was because March in 2004 had two more weekday slaughter days than 12 months earlier.

Demand growth for meats for the first quarter of 2004 was very impressive---in fact, almost unbelievable. Our demand index indicates with normal relationships the demand at the consumer level for pork was up 5.3 percent, for beef up 6.2 percent and for broilers up 5.8 percent for January-March of 2004 compared to 12 months earlier.

In 53 years of working in the meat industry, I do not remember growth such as the industry has had so far this year. 1973 would probably be the closest. For 1973, beef demand was up 4.1 percent from 1972 and pork demand was up 4.4 percent from a year earlier.

For some reason this demand growth has not occurred for turkey. Using the same procedure to calculate turkey demand as the other meats show turkey demand for the first quarter of 2004 was 4.2 percent less than in the same period of 2003. Retail turkey prices for the January-March period this year were up from last year, but it was due to about a 6 percent decline in per capita consumption from 12 months earlier.

The demand for live hogs in the first three months of 2004 was even more impressive than the consumer demand with a growth between 9 and 11 percent from 12 months earlier.

How can we have around a 10 percent increase in live hog demand with only about a 5 percent increase in consumer demand? The answer is with shrinking market margins; this can and did occur in January-March this year compared to last year.

This has been a good week in the hog industry as to price. Sioux Falls had a live top of $55.00 this week. The last time we had prices this high was the summer of 2001 when we had a $56.00 high at Sioux Falls on June 26th.

Live top prices this Friday were from $3.50 to $6.00 above 7 days earlier. These prices were Peoria $49, St Paul $53, Sioux Falls $55 and interior Missouri $51.75.

The average weighted price for 185# carcasses with 0.9-1.1" back fat, 6 sq. inch loin 2" deep were $3.99 to $4.47 above last Friday for the morning report. These prices by region were: western Cornbelt $70.95, eastern Cornbelt $70.17, Iowa-Minnesota $70.72 and Nation $70.45.

Pork product supported the increase in hog prices this week. Loins with quarter-inch trim at $117.80 per cwt were up $5.30 per cwt from a week earlier. Boston butts at $97.09 per cwt were up $7.24 per cwt. Hams weighing 17-20 pounds at $56 were steady with a week earlier and 14-16 pound bellies were up $3.00 per cwt at $113.00 per cwt.

Cash feeder pig prices were steady to $25.00 per cwt lower than 2 weeks earlier at United Tel-O-Auction. The prices by weight groups at United this week were: 40-50# $100.00 per cwt, 50-60# $78.00-92.00 per cwt, and 60-70# $71.00-84.50 per cwt.

Slaughter this week under Federal Inspection was estimated at 1912 thousand head---up 6.2 percent from a year earlier.

5m Editor