Slaughter runs above expectation despite weather

US Weekly Hog Outlook, 24th March 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 24 March 2007
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We reached a milestone with this letter last week. It was the 1,000 issue distributed electronically.

Our estimate of the March 1 Hogs and Pigs report is for all hogs and pigs to be up 2.2%, breeding herd same as in 2006 and market herd up 2.4%.

Hogs slaughtered through the first three full weeks of March are up 6-7%. Some of this increase was due to the Midwest snow storm in early March that disrupted slaughter on Thursday and Friday March 1 and 2.

Slaughter in March is running some above expectations based on the December market inventories, even after adjusting for the smaller slaughter due to weather the first two days of March.

Retail pork prices for January and February were 0.7% higher than in 2006. Pork marketing margins for the first two months of 2007 were down 2.4% from a year earlier. The smaller marketing margin and the increase in retail prices permitted packers to pay 9.6% more for barrows and gilts for the first two months of 2007 than 2006.

The demand for live hogs continues to run some above 12 months earlier. For December, January and February live hog demand was up 1.3% from the same months last year.

Average barrow and gilt weights in Iowa-Minnesota climbed above year earlier levels by 0.1 pound per head, following 24 weeks with weights below 12 months earlier. At least a portion of the increase in weights is probably due to the delay in marketings in early March due to snow storm.

With the big slaughter again this week, hog prices came under additional downward pressure but did not collapse completely.

Live top hog prices Friday morning were $0.75 lower to $1.00 per cwt higher compared to 7 days earlier. The weighted average negotiated carcass prices Friday morning were $1.06 to 1.35 per cwt lower compared to a week earlier.

The top live prices for select markets Friday morning were: Peoria $39.00 per cwt, St. Paul $40.00 per cwt, Sioux Falls was unavailable and interior Missouri $41.00 per cwt. The weighted average negotiated carcass price by area were: western Cornbelt $57.64 per cwt, eastern Cornbelt $56.26 per cwt, Iowa-Minnesota $57.68 per cwt and nation $57.06 per cwt.

Pork cut-out value per cwt of carcass through Thursday was down $1.56 per cwt from a week earlier. Loin prices at $75.27 per cwt were down $4.52 per cwt, Boston butts were up $0.12 per cwt at $73.24 per cwt, hams at $50.20 per cwt were up $0.53 per cwt and bellies were down $3.95 per cwt at $91.38 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,117 thousand head, up 8.3% from a year earlier.

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