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Ron Plain

Demand continues to carry the day. Last month's hog prices ($55.38/cwt (live) at the terminals and $77.80/cwt (dressed) on the national prior day purchased report), were the highest for any month since July 1997. The price run-up was not because of a shortage of pork. Based on preliminary data, it looks like daily hog slaughter last month was the highest for any May since 1980.

Cash hog prices ended this week steady to $3 higher than last Friday. Sioux Falls reported a top of $60 on Monday then dropped back. The top price Friday at Sioux Falls was $56/cwt, unchanged from seven days earlier. St Paul was a dollar higher than last Friday with a top of $55/cwt. Peoria had a top of $53/cwt on Friday, up $1 for the week. Interior Missouri hogs had a $54 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 $77.17/cwt, $3.01 higher than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $77.18, western corn belt $77.15, and Iowa-Minnesota $77.23/cwt.

The increase in hog prices occurred despite a slightly weaker cutout value. On the Friday morning report, 1/4-inch trim loins weighing less than 21 pounds were trading at $1.3687 per pound, down 2.13 cents from the previous Friday. Boston butts gained half a penny for the week to 98 cents per pound on Friday. Ham prices were 4.69 cents higher at 65 cents per pound on Friday for 17-20# hams. 14-16 pound pork bellies ended this week 6 cents lower at $1.10 per pound.

Because of the federal holiday for Former President Reagan's funeral, there is limited data available today. The futures markets are closed as well as most USDA offices.

Through Thursday, federally inspected hog slaughter was on a pace that would total around 1.91 million for the week. This would be 3% more than a year ago and the first week ever during the month of June with slaughter above 1.9 million hogs.

During the first 22 weeks of this year, sow slaughter has been 7% higher than during the same weeks of 2003, despite there being fewer sows available to kill. As a percent of the breeding herd, year-to-date sow slaughter is up over 9%. This high number obviously isn't due to disappointing hog prices thus far in 2004. It appears to be either a reaction to financial losses in 2002 and 2003 or a response to high feed costs. Time will tell how many of these sows are being replaced by bred gilts, but our gilt slaughter data says that not nearly all of them are.

Weights are telling a mixed story. During the last three weeks of May, live barrow and gilt weights in Iowa-Minnesota averaged 2.2 pounds heavier than a year ago while the national average barrow and gilt dressed weight was down 0.6 pounds. Is this due to better growing weather in the western corn belt, or are eastern producers pulling forward on marketings because of feed costs?

Feeder pig prices are following their usual spring pattern of lower prices. Prices for Missouri feeder pigs this week sold by United Producers were $70.50-88.50/cwt for 40-50 pound pigs, $81.50-88.50/cwt for 50-60 pounders, and $61-90/cwt for 60-70 pound pigs.

The June lean hog futures contract ended the week at $78.40, down 60 cents from last Friday. The July contract settled at $76.32 today, down $1.38 for the week. August closed the week at $76.22.