Slaughter this week up 4.5%

by 5m Editor
17 July 2004, at 12:00am

US Weekly Hog Outlook, 16th July 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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Slaughter this week was estimated at 1914 thousand head --- up 4.5% from a year earlier and the first time for above a 1.9 million head slaughter in July. We have had a slaughter under Federal Inspection of 1.9 million for a week in every month so far this year. This is a first for the United States.

We never have had a day in July with a preliminary estimate of above 390 thousand head slaughter before 2004. We believe the probabilities are very high for a 390 thousand or larger daily slaughter in every month of 2004 with the exception of May.

We now have nearly 3 years of daily data estimating the percent lean of hogs. In 2003, the average barrow or gilt carcass weighed 197.96 pounds and was 53.95 percent lean.

The mandatory price reporting shows a seasonality in the leanness of hogs with the high in late winter to early spring. In 2003, the high month for percent lean of barrows and gilts was 54.2 percent and the low month was November at 53.7 percent. Why this seasonality is for the most part a mystery to me. The lightest average carcass weight comes most in August and the heaviest carcass weight month is November or December. In 2003, the month with the lowest average weight of 194 pounds was August and the high month was November with an average weight just shy of 201 pounds. Logic would suggest that the highest percent lean should come at the time of the year when the carcasses are the lightest.

Cash hog prices held quite well this week with a record high weekly slaughter for July. The live prices on Friday this week were from -$0.50 to $1 higher compared to 7 days earlier. These top live prices for select markets were: Peoria $53, St. Paul $55, Sioux Falls $56, and interior Missouri $54.

Average carcass prices were $0.68 lower to $0.35 higher per cwt than a week earlier on Friday morning. These carcasses weighing 185 pounds with 0.9-1.1 inch back fat, 6-square-inch loin 2 inches deep average price by area this Friday were: western Cornbelt $77.17, eastern Cornbelt $76.20, Iowa-Minnesota $77.28, and nation $76.47.

Pork exports for May were up nearly 22 percent from 2003 and for January-May were up 29.7 percent from a year earlier. Exports were up to all of our major markets other than South Korea which was down 25.7 percent from last year for January-May. Mexico continues to show nearly a 92 percent increase from 2003 for the 5 months. However, the Mexican pork industry continues to try to limit our exports to them. Hopefully they will not be successful.

Pork imports for January-May were down 7.5 percent from last year. All three of our major suppliers of pork, Canada, Denmark and Poland, were down in their sales to us so far this year.

Live hog imports for the first 5 months of 2004 were up nearly 44 percent from a year earlier. Feeder pig imports were up 31.5 percent and slaughter imports were up 76.4 percent from 12 months earlier.

Our slaughter this year would have been up substantially less without the larger live hog imports from Canada.

Our exports of live hogs are up sharply, percentage wise, but still amount to less that 90 thousand head for the first 5 months of this year.

Pork product prices weakened some this week with the big slaughter but still held quite well with the record weekly production for July.

5m Editor