Hog Outlook: Extra Pork Exported to China

US Weekly Hog Outlook, 25th August 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 25 August 2007
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Retail pork prices in July set a new record high... up 0.9 percent from June and up 3.3 percent from July of 2006. The average retail price for pork for January-July was up 2.2 percent from a year earlier.

The packers and producers benefited from these higher retail prices. The packers margin for January-July was up 2.6 percent from last year and producer prices were up 6.9 percent for these seven months compared to 12 months earlier. The processor-retailer margin was flat with a year earlier.

Pork exports during June were down 8.4 percent from 2006. Pork exports for January-June were down 3.5 percent from 12 months earlier. Our pork exports for the first six months were up 9.4 percent to Japan up 1.9 percent to Canada, down 31.3 percent to Mexico, down 20.7 percent to Russia, down 0.4 percent to South Korea, up 62 percent to Mainland China and Hong Kong, down 36.7 percent to Taiwan, down 31.3 percent to Caribbean and down 0.4 percent to other.

It Now looks like the speculation about exporting extra pork to China because of their pork shortfall due to disease is likely to happen. China has a zero-tolerance policy for ractopamine. China has just delisted seven more pork plants for finding traces of ractopamine in U.S. pork products. The total number of pork plants delisted is 15. However, in late weeks Smithfield announced they had made a sale of 60 million pounds of paylean free pork to China

U.S. pork imports for the first six months of 2007 were down 0.1 percent. Net pork exports for January-June are down from 10 percent of production in these six months of 2006 to 9.3 percent this year. This means the nearly 3 percent growth in live hog demand for January-June of 2007 compared to a year earlier is due to domestic demand.

Live hog imports for January-June from Canada were up 10.7 percent from last year. Feeder pig imports were up 8.2 percent and slaughter hog imports were up 16.7 percent from 12 months earlier.

The cutout value of pork per cwt of carcass at $72.08 per cwt Thursday afternoon down $1.09 per cwt from a week earlier. Loins were down $1.57 per cwt at $86.99 per cwt, Boston Butts at $60.40 per cwt were down $10.66 per cwt, hams were down $2.18 per cwt at $63.07 per cwt and bellies at $89.83 per cwt were up $3.93 per cwt from seven days earlier.

Top live hog prices this Friday morning were $0.50 to 0.75 per cwt lower compared to a week earlier. The weighted average negotiated carcass prices Friday morning were $1.52 to 2.89 per cwt lower compared to seven days earlier.

Top cash prices for select markets Friday morning were: Peoria $44.50 per cwt, St Paul $47.00 per cwt, and interior Missouri $46.75 per cwt. The weighted average negotiated carcass prices Friday morning were: western Cornbelt $65.19 per cwt, eastern Cornbelt $62.34 per cwt, Iowa-Minnesota $65.13 per cwt and Nation $63.62 per cwt.

Slaughter this week under Federal Inspection was estimated at 2065 thousand head up 2.9 percent from a year earlier.

Live hog weights for barrows and gilts in Iowa-Minnesota last week at 260.8 pounds were up 0.3 pounds from a week earlier but down 0.1 pound from a year earlier.

The Canadian July first hog inventory was two percent below a year earlier. The breeding heard was down one percent and the market herd was down three percent. However, the combined mid year hog herd in the U.S. and Canada was up 0.9 percent from a year earlier.

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