Hog prices ended July on a strong note

by 5m Editor
7 August 2004, at 12:00am

US Weekly Hog Outlook, 6th August 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

Ron Plain
Ron Plain

For the six weeks ending this week Federally Inspected slaughter has been up over 4% from 12 months earlier. Based on the June Hogs and Pigs Report slaughter for this period was expected to be up about 2%. Weekly import data indicates all of this increase in slaughter is from domestic fed animals.

Hog prices ended the week with live prices steady to down $1.50 per cwt from a week earlier. However, carcass prices were somewhat stronger compared to last week with prices $0.14 to $2.41 per cwt higher compared to Friday of last week.

The top live prices for select markets were: Peoria $54.00, St. Paul $56.00, Sioux Falls $56.00, and interior Missouri $54.00. The weighted average carcass prices for 185# carcass with 0.9-1.1" back fat 6 sq. In. loin 2 In. deep by area were: western Cornbelt $77.89, eastern Cornbelt $75.87, Iowa-Minnesota $77.35, and nation $76.91 for the morning report Friday.

Cash feeder pig prices are holding very strong. Prices this week at United Producers tel-o-auction were steady to $10 per cwt stronger than 2 weeks earlier. The United prices by weight groups were: 40-50# $98 per cwt, 50-60# $98 per cwt, and 60-70# $84-87.50 per cwt.

Pork product prices ended the week mixed compared to last week. Loins with a ¼" trim at $115.89 per cwt were down $4.11 per cwt, Boston butts with a ¼" trim at $96.50 per cwt were down $3.00 per cwt, 17-20# hams were steady at a price of $78.00 per cwt, and 14-16# bellies were steady at $115.00 per cwt.

Slaughter for next week probably will be below a year earlier. For some reason slaughter increased over 8% from this week to next week last year.

Producers need to at least keep marketings current as we go into the seasonally increased numbers. In fact, a modest amount of pulling marketings forward could pay off in the next few weeks.

The number of producers in the U.S. that market 50,000 head or more annually is leveling off. For example the number of producers of this size increased by 120% from 1994-1997, from 1997-2000 the increase was less than 8%, and 2000-2003 the increase was only 2%.

The concentration in the proportion of the hogs produced is continuing in the U.S. industry but the rate of change is also slowing. For example from 1994-1997 the percentage of the U.S. industry produced by producers marketing 50,000 head or more annually increased by 118%, from 1997-2000 the rate of increase slowed to 31% and from 2000-2003 the rate of growth was 16%.

These data are from the 2003 structure of the hog industry study by the University of Missouri and Iowa State University that was posted on the same website as this letter this week.

Demand continues to hold strong for all meats but there was some softness reported this week in chicken breasts as well as some pork cuts along with beef.

Slaughter this week at 1865 thousand head under Federal Inspection was up by 2.9% from a year earlier.

5m Editor