Hog weights continue to run at record high levels

US Weekly Hog Outlook, 17th February 2006 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 18 February 2006
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Ron Plain
Ron Plain

The average live weights of barrows and gilts in Iowa and Minnesota have averaged above 270 pounds for eight consecutive weeks ending the week ending February 11. The average live weight for these eight weeks was 1.3% heavier in 2006 than in 2005. We believe pork production in January 2006 was up over 1% due to heavier weights.

Producers continue to increase the leanness of hogs. During January, the percent lean of hogs represented under the mandatory price-reporting program was up about 0.7% from 12 months earlier. We probably have hogs as lean as needed to be best for the industry. In fact, in order to improve taste for most consumers, the percent lean may need to be reduced some from current levels. However, as long as packers pay premiums for leanness, there will be an incentive for producers to try to make hogs cut a higher percent lean.

Currently it is relatively dry over much of the western Cornbelt and some of the western states located in the eastern Cornbelt. What are the chances of a drought this summer that would lower corn yields? Elwynn Taylor, Iowa State University Extension climatologist, puts the odds of a La Niñ persisting at 70%. A rising trend in the Southern Oscillation Index over the next few weeks would boost the risk of a drought. Taylor now puts the chance of below trend U.S. corn yields at 56%. Drought risk is some higher west of the Mississippi River and some lower east of the big river.

Feeder pig prices continue very strong. Prices this week at United Tel-O-Auction were $2 to $6 per cwt higher than two weeks earlier. The United prices by weighted groups were: 40-50 pounds $132 per cwt, 50-60 pounds $138.50, 60-70 pounds $114 to 119 per cwt.

Pork exports for 2005 were up 22% from 2004. This was the 14th year of consecutive record high exports. For all of 2005, net pork exports grew to 7.91% of production -- up from 5.27% net exports in 2004.

Pork imports for 2005 were down 6.9% from a year earlier. The decline in pork imports were from our two largest suppliers: Canada down 5.5% and Denmark down 28.2%.

Live hog imports were also down in 2005. Feeder pig imports from Canada were down 3.7% as were slaughtered hog imports down 3.7% from 12 months earlier.

The cash hog market started the week strong but ran into downward pressure by mid-week as packer margins deteriorated. Top cash prices this Friday morning were mixed compared to a week earlier.

These top cash prices Friday morning were: Peoria $39.00 per cwt, Sioux Falls $41.00 per cwt, and interior Missouri $41.75 per cwt.

Weighted carcass prices were $2.76 to $3.33 per cwt higher than a week earlier on Friday morning. The weighted average carcass price by area were: western Cornbelt $61.48 per cwt, eastern Cornbelt $58.58 per cwt, Iowa-Minnesota $61.57 per cwt, and nation $60.16 per cwt.

Slaughter this week under Federal Inspection was estimated at 1978 thousand head -- down 4.5% from the same week in 2005.

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