Hog Outlook: Slaughter a Strong Candidate

US Weekly Hog Outlook, 1st December 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.
calendar icon 1 December 2007
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Cash hog prices for Thanksgiving week rallied a bit with weighted average negotiated carcass prices Friday November 23 up $2.65 per cwt, from a week earlier in the western Cornbelt. Prices started the week following Thanksgiving with the eastern Cornbelt carcass prices up $2.24 per cwt and the western Cornbelt carcass price up $0.51 per cwt from the prior Friday.

Slaughter this week is expected to be a strong candidate for the largest week of the year and the largest of record at a little less than 2.4 million head under Federal Inspection.

The news continues to be good for pork and live hog demand. For the January-October period, demand at the consumer level showed a 2.3 percent growth and live hog demand was up 3.2 percent from a year earlier. The stronger growth at the live hog level than at the consumer level is due at least in part to pork exports. Even though pork exports for January-September were basically the same as a year earlier, pork export value was up over 6 percent from 2006 for the first nine months of 2007.

Cold storage stocks of pork at the end of October were up 2.4 percent from a month earlier and up 1.6 percent from a year earlier. The average increase in cold storage stocks of pork from September to October has been 3.4 percent in the past five years. This data continues to support the fact that our current low hog prices and losses are not due to demand but just too much increase in production.

The average live weight of barrows and gilts last week in Iowa-Minnesota at 269 pounds was 1.5 pounds below a year earlier. Weights of barrows and gilts for the four weeks ending November 24 were 0.65 pounds below 12 months earlier. We believe the high corn prices and high losses per hog for most producers may be pulling markets forward some and contributing to these light weights.

The cutout value per cwt of carcass Thursday afternoon at $60.29 per cwt up $2.21 per cwt from a week earlier. Loins at $71.11 per cwt up $0.37 per cwt, Boston butts at $55.72 per cwt up $0.11 per cwt, hams at $50.94 per cwt up $6.29 per cwt and bellies at $77.16 per cwt up $0.48 per cwt from seven days earlier.

Cash hog prices at Peoria for Friday November 23 were the same as a week earlier at $29 per cwt. All other cash live markets were closed for the Thanksgiving Day. Cash prices this Friday were $1.00 higher compared to a week earlier.

Weighted average negotiated carcass prices for Friday, November 23, were $0.90 to $2.65 per cwt higher than seven days earlier.

The weighted average carcass prices by geographic area for November 23 were: western Cornbelt $47.80 per cwt, eastern Cornbelt $44.21, Iowa-Minnesota $47.49 per cwt and nation $45.68.

For this Friday, live top prices for select markets were: Peoria $30 per cwt, St. Paul $32 per cwt and interior Missouri $33.50.

The weighted average negotiated carcass prices this Friday morning were $1.31 to 5.12 higher compared to a week earlier. These prices by geographic area were: western Cornbelt $49.11 per cwt, eastern Cornbelt $49.33 per cwt, Iowa-Minnesota $48.91 per cwt, and nation $49.26 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,397 thousand head, up 11 percent from a year earlier and the largest of record.

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