Retail pork prices in April up 0.6%

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

US Weekly Hog Outlook, 21st May 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Ron Plain
Ron Plain

For the first 4 months of 2004, pork at retail sold for 3.1 percent more per pound.

All of the increase was bid into live hog prices. The total marketing margin for January-April was down over 4 percent. The processor-retailer margin was down 3.4 percent, and the packer margin was down 7 percent from a year earlier. The price of 51-52 percent lean live hogs for these 4 months was up nearly 27 percent from the same period in 2003.

Cold storage stocks of pork at the end of April were down 1 percent from the end of March and down 13 percent from the end of April a year ago. Belly stocks on April 30 were down 8 percent from the end of March and down 5 percent from year earlier.

Chicken cold storage stocks at the end of April were up 6 percent from the end of March but down 12 percent from the end of April in 2003. Turkey stocks were also up from the end of March on April 30 but down 6 percent from a year earlier. Only beef cold storage stocks were up on April 30 from a year earlier, and all of the increases in beef stocks were boneless.

Sow slaughter for the week of May 8 was below a year earlier for the first time this year. However, for the year through the week ending May 8, sow slaughter was up over 9 percent from 12 months earlier. Gilt slaughter for the year-to-date is basically the same as a year ago. Because we reduced the breeding herd through the first part of 2003, the odds are high that we have also reduced the herd some this year.

We doubt the one week of sow slaughter being below last year is significant, but we will just have to wait and see. Sixty dollar hogs have always resulted in herd growth in the past; but with the financial stress to hog producers in the last 5 years, we believe it is too early for an expansion to start.

Cash hog prices lost some ground this week. The terminal market prices this Friday were $2.75 to $5.00 per cwt below 7 days earlier. The top prices for the markets on Friday were: Peoria $55 per cwt, St. Paul $55 and interior Missouri $55. The weighted average prices for 185-pound carcasses with 0.9-1.1-inch back fat, 6-square-inch loin 2 inches deep by area were: western Cornbelt $78.29, eastern Cornbelt $80.02, Iowa-Minnesota $77.92 and nation $79.42 per cwt Friday morning.

Pork product prices this Friday at noon were mixed compared to a week earlier. Loins with a quarter-inch trim this Friday were $150.50 per cwt compared to $150.00 a week earlier; Boston butts with a quarter inch trim were up $1.16 per cwt at $102.45 per cwt; 14-16# bellies at $124.00 per cwt compared to $121.00 in late week 7 days ago; and 17-20# hams at $57.20 per cwt were down $3.80 per cwt from a week earlier.

After 2 weeks with slaughter near a year earlier, the industry found hogs this week. The estimated slaughter under Federal Inspection for this week was estimated at 1,895 thousand head --- up 4.8 percent from a year earlier.

There is a good chance that field work the part 2 weeks was at least part of the reason for some of the reduced slaughter of the past 2 weeks.

The odds may be relatively high for the high in prices for the year unless we again find slaughter near or below last year in June.

5m Editor