Hog Markets See Stability in Prices

US Weekly Hog Outlook, 27th January 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 27 January 2007
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Hog producers continue to market hogs at lighter weights. For the week ending January 20, the average weight of barrows and gilts in Iowa-Minnesota at 269.1 pounds were 3.4 pounds lighter than a year earlier and 0.7 pound below a week earlier. This was the seventeenth consecutive week for hog weights in Iowa-Minnesota to be below a year earlier.

The average weights for these 17 weeks have averaged 1.1 pounds below a year earlier, and the last 4 weeks have averaged 2.4 pounds below 12 months earlier. These data indicate marketings have been pulled forward a day or two. If so, the supply of hogs has not been as large relative to expectations as indicated by slaughter. This is very good news.

The retail price of pork in December 2006 was 1% below November 2006 and 0.6% below a year earlier. For the year of 2006, retail pork prices were 0.7% below 12 months earlier.

The total marketing margin for 2006 was 1.4% above a year earlier. The wholesale to retail margin was 1% above 2005 and the packer margin was 3.3% above 12 months earlier.

Both consumers and marketers benefited from cash hog prices being 5.5% below 2005 in 2006.

Gilt slaughter for the four weeks ending January 20 were 1.1% below a year earlier and about 1% below the long-time average. However, for November and most of December gilt slaughter was above a year earlier and the long-time average. Sow slaughter for the 4 weeks ending January 6 was 3.3% above a year earlier. The current data does not indicate producers are reducing the breeding herd.

The cost of producing hogs will be near $50 per cwt by late spring unless corn prices decline substantially from current levels.

Cash top hog prices this Friday morning were steady to $0.50 higher per cwt compared to a week earlier. The weighted average negotiated carcass price this Friday morning was from $0.12-2.49 higher per cwt compared to 7 days earlier.

The top live prices Friday at select markets were: Peoria $38.50 per cwt, St. Paul $43.00 per cwt, Sioux Falls was unavailable and interior Missouri $41.00 per cwt. The weighted average carcass prices in the negotiated trade Friday morning were: western Cornbelt $60.92 per cwt, eastern Cornbelt $57.91 per cwt, Iowa-Minnesota $60.69 per cwt and nation $58.81 per cwt.

Pork cutout value per cwt of carcass Thursday afternoon at $64.14 per cwt was down $0.01 per cwt from a week earlier. Loin prices Thursday afternoon were up $0.85 per cwt at $79.96 per cwt, Boston butts at $71.64 per cwt were down $2.82 per cwt from 7 days earlier, hams were up $0.84 per cwt at $53.14 per cwt, and bellies at $82.55 per cwt were up $1.54 per cwt from a week earlier.

Slaughter under Federal Inspection was estimated at 2,083 thousand head, up 2.7% from a year earlier.

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