The week ended with hog prices mixed compared to seven days earlier. The top price Friday at Peoria was $45/cwt, off $2.50 from the previous Friday. St Paul was steady at $49 and Sioux Falls had a top price of $51.50/cwt. The interior Missouri top Friday was $49.75, down $0.75 for the week. The national weighted average carcass price Friday morning for negotiated hogs was $69.33/cwt, $0.44 higher than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $70.83, western corn belt $68.82, and Iowa-Minnesota $68.85/cwt. Hog prices are roughly $1-3 lower than early June 2006.

Hog prices got no help from the cutout value which also dropped this week. The Thursday afternoon USDA calculated cutout value was $73.23/cwt, down $1.01 from the previous Thursday. Pork loins were sharply lower, Boston butts and pork bellies lost a bit and hams were higher. The weakness in product values has packers cutting back on hours and lowering hog bids.

This week's hog slaughter was 1.924 million head, up 1.4% compared to the same week in 2006. Year-to-date slaughter is up 1.9%.

The average carcass weight of barrows and gilts slaughtered the week ending May 26 was 198 pounds, up 1 pound from the same week in 2006. This is the first week with barrow and gilt carcass weights above the year-earlier level since the last week of September. With corn prices $1.50/bushel higher than year-ago, slaughter weights should remain relatively light, especially if we have a hot summer.

Since March 1, hog slaughter has averaged 3.5% higher than the same period last year. This is well above the 1.6% increase indicated by USDA's March inventory report. Imports of slaughter hogs from Canada were 8.6% higher than last spring. Thus, slaughter of U.S. raised hogs since March 1 is only up 3.3% compared to last year. Look for some upward revisions in the next hog inventory report. Weekly feeder pig imports during March-May were up 10.2% compared to the same period last year. As you might expect given the large number of hog imports, 2007 Canadian hog slaughter is down 2.5% compared to last year.

Sow slaughter through May was 2.96% higher than for the same weeks in 2006 and 4.63% higher than in January-May 2005. Part of this increase is due to a larger sow herd this year. Part is likely due to $3 plus corn. We expect the breeding herd inventory in USDA's June hogs and pigs report to be a fraction of 1% larger than June 2006. The number of litters farrowed this spring was forecast to be down 0.5%, so the June 1 market hog inventory should be fairly close to last year.

Hog death losses from circo virus continue to plague the industry. An adequate supply of vaccine could add a significant number to hog slaughter.

The June lean hog futures contract ended the week at $72.87/cwt, down $2.00 from last Friday. The July contract settled at $73.75 today, down $1.04 for the week. August closed the week at $73.37/cwt and October settled at $67.50.