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Strong ham prices driven by Mexico exports

by 5m Editor
26 June 2004, at 12:00am

US Weekly Hog Outlook, 25th June 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Ron Plain
Ron Plain

Ham prices Thursday evening were about 35% above a year earlier. This compares with loin prices up 8%, Boston butts down about 7% and belly prices up 16% from a year earlier.

We understand the strong ham prices are being driven by exports to Mexico. Remember for the 1st 4 months of 2004 our exports of pork to Mexico were up nearly 92% from the same months of 2003.

Reports are that Mexico demand for hams is so strong that recently they have imported some boneless hams even though with their low cost labor they can bone hams at lower costs than the US packers can. Let's hope that whatever the factor is that is causing this strong demand continues.

Cash hog prices rallied in early week but lost some ground in late week. The weekly average price this week probably was above a week earlier.

Top live hog prices this Friday morning were from steady to $4 higher compared to 7 days earlier. These top prices for select markets were: Peoria $57.00, St. Paul $54.00, Sioux Falls $58.00 and interior Missouri $56.50.

The weighted average price for 185# carcass with 0.9-1.1" back fat, 6 sq.in. loin, 2" deep by area for Friday morning was : western cornbelt $80.60, eastern cornbelt $79.28, Iowa-Minnesota $80.66 and nation $80.00.

Pork product prices this Friday noon were mixed this week compared to 7 days earlier. Loins with ¼" trim were $11.71 lower at $118.00 per cwt, Boston butts with ¼" trim were down $12.50 per cwt at $93.50, 17-20# hams were up $5.07 per cwt at $67.57 per cwt and 14-16# bellies were up $8.00 per cwt at $116.00 per cwt.

Cash feeder pig prices appeared to be some stronger this week than 2 weeks earlier at United Producers Tel-o-auction. However, there were some small lots in the 2 lower weight groups that were lower in price this week than two weeks ago. The United prices were 40-50# $65-91 per cwt, 50-60# $65-93 per cwt, 60-70# $82.50-83 and 70-80# $73 per cwt.

Feeder pig prices have held strong later in the summer than normal.

Slaughter this week under Federal Inspection was estimated at 1856 thousand head - up 3.6% from a year earlier.

Cold storage stocks of pork at the end of May were very positive for prices. Total stocks of pork in cold storage were down 16%, hams were down 37%, bellies were down 10%, loins were down 5% and Boston butts were down 45%. All comparisons are with a year earlier.

The June 1 Hogs and Pigs came in a little more positive than we expected but close to the average of the track estimates

The total number of hogs on June 1 was up 1%, breeding head down 2% and market herd up 1%.

Our preliminary estimate is for a slaughter in the 3rd quarter to be up about 3% and 4th quarter down between 1 and 2%, compared to a year earlier. The decline in the 4th quarter is due to 1 less week day slaughter in the 4th quarter of 2004 than 2003.

With this level of slaughter we expect prices at terminal markets to average $47-50 and 4th quarter $42-45 per cwt. This compares with #38.66 for the 3rd quarter and $34.15 for the 4th quarter of 2003.

A more detailed summary will be on the AgEBB 12 noon on June 28

5m Editor