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Pork Production for 2005 less than 0.1% on 2004

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

US Weekly Hog Outlook, 13th August 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

Ron Plain
Ron Plain

USDA's most recent estimate of pork production for 2005 is for an increase from 2004. However, this increase is less than 0.1 percent. We certainly hope they are correct. Our gilt and sow slaughter data for the past several weeks indicates pork producers have probably at least stopped the decline in the breeding herd.

If we have stopped the decline in the breeding herd, with productivity growth running an average of about 3 percent, the probabilities are high for pork production to be up more than 0.1 percent in 2005 over 2004.

There is some hope that the number of slaughter hogs imported from Canada will be down some from this year in 2005. However, the odds probably favor more feeder pig imports from Canada next year than the current one.

We have been estimating hog slaughter in 2005 will be up by 1 to 2 percent and with the current gilt and sow slaughter we are concerned that our estimate for pork production in 2005 is too low.

USDA's current estimate of pork exports for 2005 is an increase of less than 0.1 percent from this year's record level. With the big increase in pork exports in 2004, a slow down in the increase is probably highly likely in 2005.

USDA's current estimate of hog prices for 2005 is for an average of $47.00 for 51-52 percent lean live hogs. Their current estimate is $49.50 per cwt for this year for 51-52 percent lean live hogs. Our current estimate for hog prices next year is relatively close to the USDA estimate.

The USDA August estimate of the 2004 corn production is 10.923 billion bushels---a new record high by a substantial margin. The average yield per acre for 2004 is estimated at 148.9 bushels.

With this big crop, USDA is estimating an average farm price for corn of $2.05-2.45 per bushel for the 2004-05 marketing year. The midpoint of this estimate would be $0.15 per bushel less than during the current corn marketing year.

USDA's August estimate of the soybean crop is down some from the July estimate but at 2.877 billion bushels the crop estimate is for a 386 million bushel increase from 2004.

The USDA August per ton estimate for soybean meal prices has a midpoint of $195 per ton---this would be down $65 per ton from the current 2003-04 estimate.

So the good news for hog producers is that feed prices at least until next summer are likely to be below the last 12 months prices.

Hog slaughter under Federal Inspection for this week was estimated at 1,932 thousand head. However, this week's slaughter level was 1.7 percent below the big weekly slaughter this week last year. The good news is that current hog prices are about 30 percent above last year even though slaughter for the past 4 weeks is estimated to be 2-3 percent above the same weeks in 2004.

Cash hog prices live for this Friday were $1.50 to $3.00 below last Friday. These prices were: Peoria $52.50 per cwt, St. Paul $53.50, Sioux Falls $53.00 and interior Missouri $51.75.

The weighted average price for 185-pound carcasses with 0.9-1.1-inches of back fat 6-square-inch loin 2 inches deep was also lower this Friday compared to a week earlier.

The prices for carcasses by area were: western Cornbelt $74.28, eastern Cornbelt $74.08, Iowa-Minnesota $73.97, and nation $74.08 per cwt.

5m Editor