Ron Plain

Hog slaughter since the first of July is running nearly 4 percent above last year. This is about double the increase expected from the June 1 Hogs and Pigs report. This entire overrun is believed to be due to U.S. production for slaughter hog imports from Canada since July 1 is about the same as a year earlier.

Practically every hog producer we have visited with in the last 3 months has reported substantial productivity growth.

If production continues to run around 2 percent above expectations we will set another record for the number of hogs slaughtered in the fourth quarter. Current data indicates that this overrun is likely. However, the cooler weather this summer may have increased gains and permitted producers to pull marketings forward. But weights last week in Iowa-Minnesota were nearly 2 pounds per head above last year and carcass weights were 2 pounds per hear above a year earlier for the 2 weeks ending August 7. With these heavier weights we doubt marketings have been pulled forward very little if any.

With the record big slaughter this week cash hog prices were pushed lower. The good news is that the strong demand is holding. Even with this big slaughter, hog prices this Friday were over 40 percent above a year ago. However, if slaughter does continue to overrun expectations cash hog prices for the remainder of the year may be pushed a little lower than we expected based on the June report, but will likely run in the low to mid 40's for 51-52-percent lean hogs for the fourth quarter.

Cash hog prices live this Friday morning were steady to $2.50 per cwt below a week earlier. Average carcass prices were $1.08 to $2.12 per cwt down from 7 days earlier.

The live prices for select markets this Friday morning were: Peoria $50.00 per cwt, St. Paul $52.00 per cwt, Sioux Falls $53.00 per cwt and interior Missouri $49.50 per cwt.

The weighted average prices for 185-pound carcasses, 0.9-1.1-inches of back fat, 6-square-inch loin 2 inches deep by area this Friday morning were: western Cornbelt $72.31 per cwt, eastern Cornbelt $71.57 per cwt, Iowa-Minnesota $72.89 per cwt, and nation $71.96 per cwt.

Retail pork prices in July were nearly 7 percent above a year earlier and for the first 7 months of 2004 retail pork prices were up nearly 5 percent from 12 months earlier.

The producer received all of the increase in retail prices for the January-July period plus some. Live hog prices for these 7 months were up over 44 percent, but the processor-retailer margin was down over 3 percent for this period and the packer margin was down nearly 2 percent compared to the same months of 2003.

Pork exports for June were up nearly 14 percent this year compared to last year. However, our sales to Japan in June were flat with a year earlier.

For January-June pork exports were up 25.5 percent from 12 months earlier. Our pork sales were up to all major buyers for January-June except for South Korea.

Pork imports for the first 6 months of 2004 were down nearly 9% from last year. Imports from our 2 major suppliers—Canada and Denmark—were both down.

Total live hog imports from Canada for January-June were up 33.1 percent from 12 months earlier. Feeder pig imports for this period were up 23.4 percent and slaughter hog imports were up over 58 percent.

Feeder pig prices are holding strong. Prices at United Tel-o-Auction were steady to some lower this week with 2 weeks earlier. These prices by weight groups were: 40-50# 98.00 per cwt, 50-60# $80-90 per cwt, 60-70# $81.50-88.00 per cwt, and 70-80# $80.50 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,025 thousand head—up 7.9 percent from a year earlier.