Good News for Hog Producers

US Weekly Hog Outlook, 31st March 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 31 March 2007
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The average of the trade estimates is for the total number of hogs and pigs on farms March 1 to be up 1.5 percent from 12 months earlier, the breeding herd to be up 0.5 percent, and the market herd to be up 1.7 percent.

The market hogs by weight groups show number of pigs weighing less than 60 pounds up 2.4 percent, 60-119 pounds up 1.9 percent, 120-179 pounds up 1.7 percent and hogs weighing over 180 pounds up 2 percent.

We believe the 180-pounds-and-heavier category of market hogs on March 1 was up about 3.5 percent from a year earlier. Preliminary data shows daily slaughter during March was up about 3.5 percent from 2006. Total Federally Inspected slaughter is believed to be very close to last year but there was one more weekday slaughter day in March 2006 than in 2007.

The average weight of barrows and gilts last week in Iowa-Minnesota was up 0.2 pound per head from a week earlier but the same as a year earlier at 269.6 pounds per head. This data indicates marketings in Iowa-Minnesota are about the same as a year earlier as to currentness.

Cash feeder pig prices this week at United Tel-O-Auction were a little stronger than two weeks earlier. The prices by weight groups were: 40-50 pounds $105.50 per cwt and 50-60 pounds $101-$110 per cwt.

Cash top hog prices this Friday morning were steady to $0.75 per cwt higher compared to a week earlier. Weighted average negotiated carcass prices this Friday morning were $0.67 to $2.04 per cwt higher compared to 7 days earlier.

The top prices for live hogs Friday morning were: Peoria $39.00 per cwt, St. Paul $40.00 per cwt and interior Missouri $41.75 per cwt. The weighted average negotiated carcass prices by area Friday morning were: western Cornbelt $58.31 per cwt, eastern Cornbelt $58.30 per cwt, Iowa-Minnesota $58.65 per cwt and Nation $58.31 per cwt.

Carcass cutout values per cwt of carcass Thursday afternoon were up $0.37 per cwt from a week earlier at $64.78 per cwt. Loin prices at $77.63 per cwt were up $2.36 per cwt, Boston butts were up $0.47 per cwt at $73.71 per cwt, and hams at $48.21 per cwt were down $1.99 on Thursday afternoon compared to 7 days earlier. Bellies at $90.33 were down $1.05 per cwt from last week.

Slaughter this week under Federal Inspection was estimated at 2,097 thousand head, up 5.7 percent from a year earlier.

Hog producers received good news Friday morning. Weather permitting, corn producers plan to plant 90.45 million acres to corn in 2007. This is nearly 2.5 million acres above the average of the trade estimates and 12.15 million acres above the 2006 corn planted acreage.

This planted acreage, if achieved, will not bring corn prices back to early 2006 levels but will exert downward pressure on price for at least a few days. The six nearby contracts were down the $0.20 limit in the corn futures market at 1:00 p.m. Central time Friday.

The March 1 Hogs and Pigs Report came in very close to trade expectations based on the average of the pre-report estimates.

The total herd was up 1.3 percent, the breeding herd up 0.9 percent and the market herd up 1.3 percent.

The report came in a little more bullish than we expected. If the report is correct, we will go from marketings up about 3.5 percent on a daily basis from 2006 in March to marketings near a year earlier in April.

If this occurs, we expect cash hog prices to rally substantially through April.

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