Hog Outlook: Hogs Find Way to Markets

US Weekly Hog Outlook, 31st August 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 1 September 2007
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Cold storage stocks of pork at the end of July were down two percent from the end of June but up 10 percent from the end of July 2006. The cut with the largest growth was hams, up 52 percent on July 31 from 12 months earlier.

With the liberal supplies of hogs now finding their way to markets, the increase in cold storage stocks of pork is negative to hog prices.

The good news about storage stocks of meat is that beef stocks at the end of July were down two percent from 12 months earlier and chicken stocks were down a whopping 11 percent from the same date in 2006. With the smaller stocks and reduced production of chicken in the first half of 2007 from a year earlier, chicken prices currently are substantially above last year at this time.

The demand for pork at the consumer level for January-July was up 1.7 percent from last year. The demand for live hogs for this seven-month period was up 3.3 percent. Practically all of the higher retail price of 2.2 percent was bid through to the live hog prices. For the first time in 15 years pork exports for January-June were down 3.5 percent from a year earlier. However, byproduct values for hogs are quite strong and the data show growth in the value of pork exports even though the tonnage is down so far this year.

The use of artificial insemination in the hog industry grew very fast from 1997 to 2003, but it leveled off between 2003 and 2006 based on a study by the University of Missouri and Iowa State University with financial support from the National Pork Board, Pig Improvement Company and Pork Magazine.

Percent of Litters Sired by Artificial Insemination by Size of
Operation and Survey Year
Firm Size
(thousand head mktd. annually)
1997 2000 2003 2006
1 - 3 10% 23% 23% 22%
3 - 5 21 33 66 69
5 - 10 39 40 79 79
10 - 50 58 65 91 88
50 - 500 75 95 98 100
500+ 84 91 100 100

Pork product prices were pushed lower this week with the cutout at $68.36 per cwt Thursday afternoon, down $3.72 per cwt from a week earlier. Loins were down $4.86 per cwt at $82.13 per cwt, Boston butts at $62.79 per cwt were up $2.39 per cwt, hams were down $2.93 per cwt at $60.14 per cwt, and bellies were down $2.93 per cwt at $86.90 per cwt.

Cash feeder pig prices at United Tel-O-Auction this week were mixed with two weeks earlier with prices both a little higher and lower for the same weight pigs. All of the groups of pigs at United this week were estimated at an average weight of 55 pounds and sold from $65-73 per cwt.

The lean hog futures contract closed Thursday at $67.85 per cwt, which was $5.82 per cwt higher than the national negotiated carcass price on Thursday. This continues to look like a good opportunity for producers who have not already done so to shift some price risk this fall.

The average live weight of barrows and gilts in Iowa-Minnesota for last week at 261.3 pounds per head was up 0.5 pound from a week earlier and up 0.7 pound from a year earlier. The odds are probably high for weights to continue above a year earlier through the remainder of the year.

Cash live hog prices Friday morning were $2.50-3.00 per cwt lower compared to a week earlier. Negotiated carcass prices Friday morning were $1.95-2.36 per cwt lower compared to seven days earlier. The top live price for select markets Friday morning were: Peoria $42, St. Paul $44 per cwt and interior Missouri $44 per cwt. The weighted average carcass prices by area were: western Cornbelt $63.03 per cwt, eastern Cornbelt $60.39 per cwt, Iowa-Minnesota $63.12 per cwt and nation $61.26 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,093 thousand head, up 1.9 percent from a year earlier.

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