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Consumer demand for pork, beef and broilers sees substantial decline

by 5m Editor
30 September 2006, at 6:57am

US Weekly Hog Outlook, 29th September 2006 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Ron Plain
Ron Plain

The weather conditions are such that hogs continue to show good rates of gain. Barrows and gilts weights in Iowa-Minnesota were up 0.2 pounds from a week earlier at 265.1 pounds per head --- up 2 pounds per head from a year earlier.

The available data continues to show a substantial decline in consumer demand for pork, beef, and broilers. For January-August pork demand at our mid-point estimated was down 5.3 percent, beef demand down 3.3 percent, and broiler demand down 7.1 percent. Demand at the live hog and fed cattle bellies continue to show much better performance than consumer demand. For January-August live hog demand was down 0.8 percent and fed cattle demand was up 3.7 percent. We believe a portion of this difference is due to incorrect data at the retail price level for meats.

The trade estimates are for the September Hogs and Pigs to show the total number of hogs and pigs on farms at 100.9 percent, the breeding herd at 101.1 percent and the market herd at 100.9 percent. We expect the breeding herd to be at 101.2 percent and the market and total herd to be at 101.3 percent.

Pork carcass cutout was pushed a bit lower with record high slaughter. The price per cwt Thursday afternoon at $67.45 per cwt was down $0.55 per cwt from a week earlier. The prices for the different wholesale cuts showed loins at $74.17 per cwt, down $1.73 per cwt, Boston butts down $0.16 per cwt at $74.09 per cwt, hams at $72.51 per cwt up $2.50 per cwt and bellies down $1.87 per cwt at $75.69 per cwt Thursday afternoon.

Feeder pig prices at United Tel-o-Auction this week were $6-8 per cwt higher than 2 weeks earlier. The United prices by weight groups were: 40-50 pounds $93 per cwt, 50-60 pounds $93 per cwt and 60-70 pounds $80 per cwt.

Slaughter hog prices were pushed some lower this week. Top live prices Friday morning were $2.00 to 4.00 per cwt lower than seven days earlier. Weighted average negotiated prices for carcasses were from $0.48 to 4.90 per cwt lower than a week earlier Friday morning.

The prices for live hogs Friday morning for select markets were: Peoria $40.00 per cwt, St. Paul $43.00 per cwt, Sioux Falls $43.50 per cwt and interior Missouri $42.75 per cwt. The weighted average negotiated carcass price by area Friday morning were: western Cornbelt $62.26 per cwt, eastern Cornbelt $58.83 per cwt, Iowa-Minnesota $62.37 per cwt and nation $60.94 per cwt.

Congress has passed a bill to extend mandatory price reporting of hogs for another four years with only minor changes from the original legislation.

Slaughter this week under Federal Inspection set a new record high for a week in September at 2142 thousand head --- up 2.9 percent from a year earlier and the third consecutive week for a record high in September based on preliminary data. September 12 Federally Inspected slaughter of 419,151 head was a new daily record high.

The Hogs and Pigs Report came in very close to our expectations, but a little higher than the average trade estimates. The total number of Hogs and Pigs Report on September 1 was 101.4 percent of a year earlier; the breeding herd was at 101.8 percent and the market herd was at 101.3 percent of 2005 number.

The number of market hogs weighing more than 180 pounds was up about 2.6 percent from 12 months earlier but slaughter in September on a daily basis has been up over 4 percent.

If marketings are close to expectations and we can hold current demand for hogs, 51-52 percent lean hogs should be in the mid- to upper-40s in the fourth quarter of 2006 and in low- to mid-40s in the first quarter of 2007.

ThePigSite News desk

5m Editor