Ron Plain

Demand for pork and live hogs, continues very strong with a small growth for January - September from January - August for both pork and live hogs.

Our demand index shows a midpoint estimated growth of 3.4% for pork and 12.2% growth for live hogs.

Broiler demand did fade a bit for January - September compared to January - August but both beef and pork showed a small growth.

We are hearing that some of the low carb products on the market show some demand weakness. However, no weakness in beef and pork demand is indicated through September.

For only the fourth year of record we have $50 per cwt live hog prices during the last week of October. The last year for $50 in late October was 1996. There is one big difference; we have 20% more pork in 2004 than in 1996.

The Canadian pig crop in July - September of 2004 was the smallest since that quarter in 2003 but was still up 0.7% from a year earlier. The good news is that this is the smallest increase in over 5 years. The breeding herd growth from October 2003 to 2004 was 1.6%. This also is the smallest growth in over 5 years.

There is now a reason for hope that the border to Japan will be open for US beef sometime in the next several weeks or few months. The US and Japan agreed on conditions the US had to meet in order to sell beef to Japan. Beef and beef by-products from cattle 21 months of age will be accepted by Japan. This is just a first step of possibly several needed to open this market.

This has been another good week for hog prices; live hog prices this Friday were from $1.50 higher to $1.00 lower compared to a week earlier. Top live prices for selected markets this Friday morning were; Peoria $48.00 per cwt, St. Paul $50.50 per cwt, Sioux Falls $51.00 per cwt and interior Missouri $47.25 per cwt.

The weighted average prices for 185# carcasses with 0.9-1.1-inches back fat 6-square-inch loin 2 inches deep were $0.97 higher to $0.05 lower compared to Friday, 7 days ago. The carcass prices by area were: western Cornbelt $69.94 per cwt, eastern Cornbelt $66.83 per cwt, Iowa-Minnesota $69.78 per cwt and nation $68.74 per cwt.

Hog prices usually weaken some from October to November. This is the most likely possibility for this year; but if the current live demand can be held and slaughter on a weekly basis is not up more than 1-2% as we go through November, terminal hog prices are likely to bottom in the mid to upper 40s for the fall of 2004.

Feeder pig prices continue very strong with the same to slightly higher prices at United Tel-O-Auction this week than 2 weeks earlier.

The prices by weight groups at United this week were: 40-50# $116 per cwt, 50-60# $107-$112.50, 60-70# $105-$110 and 80# and up $66-$87 per cwt.

Hog slaughter this week at 2,074 thousand head under Federal Inspection was down 3.3% from a year earlier.