Population growth helps drive live hog demand

US Weekly Hog Outlook, 19rd May 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 19 May 2007
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Pork exports were down again in March from a year earlier. This is the second consecutive month for exports to be below 12 months earlier. The big decrease was from Mexico, which was down 28.3 percent in March after being down 21.3 percent in February.

However, the good news is that pork exports for January - March were still up nearly three percent from 2006. But another decrease of 7.6 percent in April, which is what we had in March from last year, will pull exports down to about last year's levels for January - April.

Pork imports for January - March were down 7.7 percent from 2006. Our imports from Canada were down 5.5 percent, Denmark was down 25.1 percent, but Poland was up 19.6 percent for January - March compared to 12 months earlier.

Our net exports as a percent of production were up for January - March from 2006 but only by 0.69 percent of production. In 2006, net pork exports for these three months were 9.54 percent and they were 10.23 percent in 2007.

Live hog imports from Canada for the first three months of the year were up 7.9 percent from a year earlier. Feeder pig imports were up 6.4 percent and slaughter hog imports were up 11.4 percent from 12 months earlier.

Retail pork prices in April were 0.4 percent below March but 0.6 percent higher than April 2006. For January - April, retail pork prices were 1.1 percent above 12 months earlier.

All of the increase in retail prices plus some was enjoyed by hog producers. The total marketing margin for pork for January - April was down two percent from a year earlier. For April, live hog prices were up 16.8 percent from last year while the January - April live price was up 10.2 percent from 12 months earlier.

The 2007 growth in live hog demand is from population growth, narrower marketing margins and increased net pork exports. The factor that had contributed to stronger live hog demand, which is not likely to last, is the narrower marketing margins.

Corn planting progress last week in the U.S. was much better than anticipated. The U.S. planted percentage at the end of the week of May 13 was 78 percent, up from 53 percent a week earlier. However, 2006 planted percentage at week ending May 13 was at 83 percent.

Live hog weights for barrows and gilts in Iowa-Minnesota last week at 265.9 pounds per head were 1.8 pounds below a week earlier and down 3.0 pounds per head from a year earlier. This is the largest decrease in weights from last year since mid-February and is due, at least in part, to the high corn prices.

Pork product prices inched up some this week with the cutout at $77.74 per cwt Thursday afternoon, up $0.93 per cwt from a week earlier. Pork loins were up $0.73 per cwt at $97.86 per cwt, Boston butts at $76.66 per cwt were up $2.69 per cwt, hams were down $3 per cwt at $55.33 per cwt, and bellies at $111.33 per cwt were up $4.75 per cwt from seven days earlier.

Live hog prices Friday morning were $1 per cwt lower to $2 per cwt higher compared to a week earlier. The weighted average carcass prices for negotiated hogs Friday morning were up $0.81 to $2.70 per cwt compared to seven days earlier.

The top live prices Friday morning for select markets were: Peoria $48 per cwt, St. Paul $51 per cwt and interior Missouri $50.50 per cwt.

Slaughter this week under Federal Inspection was estimated at 1,952 thousand head, down 0.3 percent from a year earlier.

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