Strong hog prices continue

by 5m Editor
20 November 2004, at 12:00am

US Weekly Hog Outlook, 19th November 2004 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Ron Plain
Ron Plain

Hog prices continued the unbelievable roll in strong prices for November. Cash negotiated prices this Friday were $0.50 to $1.00 higher than a week earlier.

Cash hog prices this Friday were over 60% above a year earlier. Hog slaughter for the past four weeks has been down less than 4%. This level of slaughter is down from being up 4.7% in the third quarter.

With a 4% decrease in slaughter live prices at best would normally be up around 20%. Needless to say the demand for pork and live hogs continues to be unbelievable.

Pork exports in September were up 28.6% from a year earlier. Pork imports for September were down over 8% from twelve months earlier.

For January - September our pork exports to Japan were up 9.1%, to Canada up 26.3%, to Mexico up 66.3%, to Russia up 166.3%, to South Korea down 27.7%, to Hong Kong down 10.2%, to mainland China up 71.6%, to Taiwan up 72.1%, and to the Caribbean up 53.1%.

Without question a significant part of the live hog demand growth has been the gain in net exports from a year earlier. For January - September our net export of pork is up 2.1% of our production. This indicates somewhere between 20-25% of the increased live hog demand we have this year is due to the increase in exports and decrease in imports.

This growth in net export hogs added about $10 per hog to gross revenue and producer profit. For the total U.S. hog industry it amounts to nearly 0.75 billion extra revenue to hog producers for the first nine months of this year. For the year of 2004 the increase in profit to hog producers from foreign trade will likely exceed one billion dollars for pork and pork by-products as compared to a year earlier.

The return to the hog industry for the check-off from producers that contributed at least a part to the net export growth. Since 1987 the return to producers die to export growth will probably exceed four billion dollars by the end of 2004. Assuming only ¼ of this growth was due to the effort to boost exports from check-off dollars would pay the total check-off for 18-20 years. Not a bad return on investment.

Pork product prices were mixed for the week. Loins with a ¼" trim at $101.57 per cwt was down $2.18 from a week earlier, Boston butts were up $5.00 per cwt at $93.00, 17-20# hams were up $1.00 per cwt at $93.00, and bellies at $93.00 were down $N/A per cwt.

Top live prices for select markets this Friday morning were: Peoria $54.00, St. Paul $53.50, Sioux Falls $54.50, and interior Missouri $49.50 per cwt.

Prices for 185# carcasses with 0.9 - 1.1 inches back fat, 6 square-inch loin 2-inches deep weighted average by area were: western Cornbelt $78.61, eastern Cornbelt $75.03, Iowa-Minnesota $78.65, and nation $76.94 per cwt.

Slaughter this week was estimated at 2114 thousand head --- down 2.2% from a year earlier.

Gilt and sow slaughter since the first of September show no signs of growth in the hog breeding herd.

Current data suggests hog producers may have pulled marketings forward in September and now have slowed marketings some in October and November. In early September average weights of barrows and gilts were over 5 pounds above a year earlier, for the week ending November 1, weights were the same as a year earlier and for the week ending November 13, weights were 1.3 pounds above 12 months earlier

Due to Thanksgiving holiday no letter will be prepared next week. Have a happy Thanksgiving!

5m Editor