August hog slaughter a record

by 5m Editor
11 September 2004, at 12:00am

US Weekly Hog Outlook, 10th September 2004 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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August hog slaughter was a record. More hogs were slaughtered last week (August 30-September 3) than for any five day period in U.S. history. USDA estimated hog slaughter at 400,000 head for both Tuesday and Wednesday of this week. There have been only two days in history (the Mondays before Christmas in 1998 and 2003) with hog slaughter above 400,000. USDA is predicting a slaughter of 260,000 hogs on Saturday. This would be the fourteenth largest Saturday kill ever.

This week's federally inspected hog slaughter is estimated by USDA at 1.855 million head. That is 5.5% less than a year ago, due to Monday's Labor Day Holiday. When the last two weeks are combined, hog slaughter is up 4.9% compared to a year ago. This is a bit higher than the average for the previous four months. We have been expecting fourth quarter hog slaughter to be close to year-ago levels, in part because of an expected reduction in slaughter hog imports from Canada. However, hog slaughter during the last few weeks has made the June inventory numbers look low.

Growth in demand continues to outweigh the supply increase. August hog prices at the terminal markets ($52.53/cwt live) were up 41% compared to last year. Prices on the national prior day purchased report ($74.08/cwt dressed) were up 37% compared to August 2003. This increase in prices has occurred despite daily hog slaughter being 3.2% higher than August of last year.

Cash hog prices ended this week a dollar or so lower than last Friday. The top price Friday at Sioux Falls was $50/cwt. St Paul had a top of $49.50/cwt. Peoria had a top of $49/cwt on Friday, down $1 for the week. Interior Missouri hogs had a $48 top on Friday. The National weighted average carcass price Friday morning for negotiated hogs with 0.9-1.1" backfat, 6 sq. in. loins 2" deep was $69.06/cwt, 85 cents lower than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $68.87, western corn belt $69.32, and Iowa-Minnesota $69.76/cwt.

On the Friday morning report, 1/4-inch trim loins weighing less than 21 pounds were trading at $1.16 per pound, up a penny from the previous Friday. Boston butts lost 6.43 cents for the week to 73.57 cents per pound on Friday. Ham prices were a penny higher at 79 cents per pound on Friday for 17-20# hams. 14-16 pound pork bellies ended this week unchanged at 92 cents per pound.

Weights are very heavy for this time of year. For the past two weeks live barrow and gilt weights in Iowa-Minnesota were up by 6.1 and 5.2 pounds, respectively, compared to a year ago. The national average barrow and gilt dressed weight for the last full week of August was up 3 pounds from a year earlier. This is most likely due to the mild summer rather than to delayed marketings.

Today, USDA raised their forecast of the corn crop to 10.961 billion bushels. With plenty of reasonably priced feed, slaughter weights should remain well above year ago levels.

The October lean hog futures contract ended the week at $66.05, up 65 cents from last Friday. The December contract settled at $63.92 today, up 62 cents for the week.

5m Editor