Demand for pork up 3%

by 5m Editor
4 December 2004, at 12:00am

US Weekly Hog Outlook, 3rd December 2004 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Ron Plain
Ron Plain

Retail pork prices in October were 0.4% below September but January through October 2004 average retail price was up 5.3% from 2003.

All of the increase in retail pork prices plus some was built into live hog prices which were up nearly 39% in October from a year earlier and were up 29.7% for January to October in 2004 from the same month in 2003.

The total pork marketing margin for January through October was down 3.3% from a year earlier. The processor-retail margin was down 2.9% for the first 10 months of 2004 and the packer margin was down 5.0% based on USDA data.

Demand for live hogs for January through October was up nearly 12% from 12 months earlier and demand for pork at the consumer level for these 10 months was up 2.5% from a year earlier.

The supply of pork produced in the US for January to October was up between 3 and 4% and live hog prices were up nearly 30% from 2003. This demand growth is due to both foreign trade and stronger domestic demand. Our estimate is that about 85% of the demand growth is domestic.

Pork product prices were stronger for the week. Loins with a ¼" trim at $110.00 per cwt was up $6.58 from a week earlier, Boston butts nearly steady at $92.00, 17-20# hams were up $15.00 per cwt at $100.00, and bellies at $95.00 on Wednesday were up $2.00 per cwt.

Top live prices for select markets this Friday morning were: Peoria $55.00, St. Paul $60.00, Sioux Falls $60.00, and interior Missouri $57.50 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 $82.11, eastern Cornbelt $75.96, Iowa-Minnesota $82.05, and national at $79.38 per cwt.

Slaughter this week was estimated at 2082 thousand head --- down 1.4% from a year earlier.

The biggest increase in prices occurred in the western Cornbelt as regional packers have continued to try to run near capacity. In fact, the eastern-western Cornbelt differential and the terminal spreads narrowed towards the end of this week which might indicate sellers are moving hogs out of their normal area to the higher price markets The big jump in the lighter hams at the end of the week has to do with the average market weights at 268.3 pounds, a record for the week, making the smaller size hams harder to come by. All in all, hog producers should have been pleasantly surprised last week, continuing to supplying large numbers at even better prices.

5m Editor