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Ron Plain

Slaughter this week under Federal Inspection was estimated at 1615 thousand head --- not comparable with a year earlier because the July 4th holiday was celebrated in a different week this year than in 2003. The slaughter count for the last two weeks was 3409 thousand head --- up 4.2% from a year earlier.

We continue to find a few more hogs than indicated by the market inventories in the Hogs and Pigs Report.

We are a little apprehensive about what has happened in the last few weeks to sow and gilt slaughter. The sow slaughter for the three weeks ending June 26 was down slightly after adjusting for herd size. Gilt slaughter for the 2 weeks ending July 3 is down substantially from last year. However, because of the gilt data being a sample, it may be mostly sample fluctuation --- we hope. The bottom line is we may have stopped the decline in the sow herd. With productivity growth at an average of 3.2% for the last 5 years, we need to continue to reduce the breeding herd at least 2% a year to maintain production increases close to expected demand growth.

The hog industry continues to change as to the size of producers. In 2003, 59% of the slaughter hogs in the Unites States were produced by 159 producers marketing more than 50,00 head annually. The producers marketing less than 1,000 head annually accounted for only 1% of the 2003 slaughter marketings. Every size group below the 10-50,000 herd head marketing annually lost market shares between 2000 and 2003.

As would be expected with the stressed financial conditions of the past several years, the satisfaction of producers in the industry has declined substantially in the last three years. The producers responded to the question of how satisfied are you with your hog production in 200 had a score in the upper 4 range with 1 indicating very dissatisfied and 6 indicating very satisfied. The 2003 score for this same question was in the mid 3's.

Cash hog prices this Friday were from $0.50 higher to $0.50 lower compared to a week earlier. Top prices this Friday morning at select markets were: Peoria $53 per cwt, St. Paul $53 per cwt, Sioux Falls $55 per cwt and interior Missouri $54 per cwt.

The weighted average price for carcasses this Friday morning for the 185-pound carcass with 0.9-1.1-inch back fat, 6-square-inch loin 2 inches deep by area were; Iowa-Minnesota $77 per cwt, western Cornbelt $76.82 per cwt, eastern Cornbelt $76.88 per cwt, and nation $76.84.

Pork product prices this Friday at noon were a bit better then seven days earlier. Loins with ¼" trim at $128.00 per cwt were up $5.00 per cwt, Boston butts with ¼" trim were up $96.00 per cwt at $6.00 per cwt from a week earlier and 14-16 pound bellies were up N/A per cwt. 17-20# hams at $72 up $2.64 from 7 days earlier.

Cash feeder pig prices at United Tel-o-Auction were mixed from two weeks earlier. The prices by weight groups were: 40-50# $90 per cwt, 50-60# $85 per cwt and 60-70# $78-89 per cwt.