Ron Plain

Retail pork prices for June were 1.2% above May, but 2.1% below June of 2005. The average retail pork price for January through June was down 2.3% from a year earlier.

As usually happens when production increases and producer prices are pushed lower, the marketer's margin improves. For January through June, the total marketing margin was 2.2% larger than 12 months earlier. The processor-retailer margin was up 1.7% and the packer's margin was up 4.4% for this six-month period, compared to 2005. Even though the live hog prices for January through June were down 12.5% from a year earlier, June prices were 12% above May and 10.1% above June of 2005.

Consumer demand for pork for January through June of this year is down 5.3% from 12 months earlier. Live hog demand for these six months is also down, but only 1.7%. For these six months, we have lost less than 15% of the growth in live hog demand we had for this period in 2004 and 2005, which is better than we expected.

The 15% increase in pork exports and population growth are the major factors contributing to the smaller decline in live hog demand than consumer demand.

Live hog weights in Iowa and Minnesota were down 2 pounds from a week earlier due to the high temperatures in the last several days. However, these weights were still 0.5 pounds heavier than a year earlier. With the heat of this week, weights are expected to continue to decline.

Even with the hot weather, hog slaughter this week continued to run above expectations but not as much as the prior two weeks. For this week, Federally Inspected slaughter, at 1906 thousand head, was up 2.8% from a year earlier. For the past three weeks, slaughter has run 4.0% above 12 months earlier.

Triumph Pork at St. Joseph has announced they plan to start a second kill shift in early- to mid-August. When up to full speed, this will add eight thousand head per day to slaughter capacity in the U.S.

As the plant cranks up their slaughter rate, it will be positive to live hog prices. The research on the impact of increased slaughter capacity without increased production is limited, but the available research indicates when the second shift is up to full speed, it will add $0.50 to $1.00 per cwt to hog prices.

The carcass cutout value for Thursday afternoon at $70.11 per cwt was down $2.33 per cwt from a week earlier. Pork prices by cuts for Thursday showed loins down $5.69 per cwt at $77.67 per cwt, Boston butts at $75.59 per cwt were down $4.02 per cwt, hams were up $6.62 per cwt at $70.13 per cwt, and bellies at $85.75 per cwt, down $11.66 per cwt.

Top live hog prices Friday were $2.50 to $5.00 per cwt, down from a week earlier. The weighted average carcass price Friday morning were down $4.46 to $5.40 per cwt. The live top prices for select markets were: Peoria $43.00 per cwt, St. Paul $45.00 per cwt, and interior Missouri $45.25 per cwt.

The weighted average carcass prices Friday morning were: western Cornbelt $64.27 per cwt, eastern Cornbelt $62.96 per cwt, Iowa-Minnesota $64.16 per cwt, and nation $63.37 per cwt.

ThePigSite News Desk