Hog Outlook: Continued Demand for Live Hogs; Feeder prices surprisingly high

US Weekly Hog Outlook, 5th May 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 5 May 2007
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Demand for the major meats all showed some loss at the consumer level for January - March of 2007 compared to a year earlier. Pork showed a loss of 1.7%, beef down 0.8% and broiler down 6.4%.

The demand for live hogs continues to be the good demand news for the hog industry. For January - March, live hog demand was up 2.2% compared to a year earlier. The growth is probably due mostly to larger exports and smaller imports.

There has been some concern that the melamine that has caused health problems for dogs and cats has founds its way into some swine feeds, which would be negative to pork demand and price.

Based on the available information there is little, if any, probability that the meat from hogs fed the melamine would be harmful to people who consume it and every effort is being made to not let any possibly contaminated pork into trade. To date there is no sign that consumers are backing away from pork.

Pork product prices per cwt of carcass showed a big gain of $5.43 per cwt last week and a small loss of $0.82 this week with a quite large slaughter.

Gilt and sow slaughter data is running at a level that suggests little, if any, change is occurring in the size of the breeding herd.

Feeder pig prices are surprisingly high at the current time. Prices are the same to a little higher than 12 months ago. Granted, live hog prices are $4-6 per cwt higher than a year ago, but corn prices are enough higher than 12 months ago to add $7-8 per cwt live to the cost of producing hogs. Without question, demand for pigs is strong. Is it possible we have built enough finishing houses in the last year to outpace the supply of pigs?

Live hog prices this Friday morning were $3-6 higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $2.62-4.19 higher compared to 7 days earlier.

The live prices Friday morning for select markets were: Peoria $49.50 per cwt, St. Paul $54.00 per cwt and interior Missouri $51.50 per cwt. The weighted average negotiated carcass prices by geographic area Friday morning were: western Cornbelt $73.46 per cwt, eastern Cornbelt $71.41 per cwt, Iowa-Minnesota $73.68 per cwt and nation $72.38 per cwt.

Pork product cut-out this Thursday afternoon at $75.14 per cwt was down $0.82 per cwt from a week earlier. Loins were down $3.82 per cwt at $94.38 per cwt, Boston butts at $75.20 per cwt were down $0.75 per cwt, hams were down $3.18 per cwt at $60.81 per cwt and bellies at $98.83 per cwt were up $3.90 per cwt from 7 days earlier.

Barrow and gilt weights in Iowa-Minnesota last week were down 1.1 pounds from a week earlier and down 1.5 pounds from a year earlier. With corn prices where they are, weights are likely to continue below a year earlier.

Slaughter under Federal Inspection this week was estimated at 1,970 thousand head, up 7.9% from a year earlier.

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