Cold storage stocks of pork at the end of April were the second largest of record exceeded only by the stocks on March 31, 2008 --- up 23 percent from a year earlier.

The good news is that stocks were not increased during April even with production up 13-14 percent on a daily basis and up 18 percent from a year earlier for April. April 2008 had one more week day slaughter in 2008 than in 2007. Boston butt stocks were up 158 percent on April 30 from a year earlier. Belly stocks at the end of April were up 62 percent from the end of April in 2007.

Trade reports are that a portion of the larger stocks are due to a shortage of shipping containers used in export. Certainly, the hog market during April and May did not act like the market had record high stocks overhanging the market. We had one of the biggest and fastest run-up in hog prices of record for April and May. On April 1, the weighted base carcass price for negotiated hogs in Iowa-Minnesota was $49.54 per cwt. By May 20, the same grade and class of hogs in Iowa-Minnesota was up to $82.43 per cwt --- up 66 percent.

The news continues to be positive for the demand for pork at the consumer level and for live hogs. For the fist four months of 2008 consumer demand for pork in the U.S. was up 3.5 percent from a year earlier. The demand for live hogs was up between six and nine percent depending on the elasticity used. The larger increases in live hog demand than consumer demand was due mostly to the record high exports.

According to a report from the U.S. Department of Agriculture attaché report posted on the Foreign Agriculture Service web site, China's pork imports are expected to remain steady and prices high throughout 2008 after the earthquake that shook the Sichuan province.

Pork cutout values per cwt of carcass at $80.65 per cwt Thursday afternoon were down $0.08 per cwt from a week earlier. Loins at $101.81 per cwt were down $4.45 per cwt, Boston butts at $94.78 per cwt were up $3.86 per cwt, hams at $68.40 per cwt were up $4.79 per cwt and bellies at $90.98 per cwt were down $0.90 per cwt from a week earlier.

Live hog prices Friday morning were down $2.00-$3.50 per cwt from a week earlier. Weighted average negotiated carcass prices Friday morning were $1.90 to $6.91 per cwt lower compared to seven days earlier.

The top live hog prices Friday morning for select markets were: Peoria $48 per cwt, Zumbrota $51 per cwt and interior Missouri $52.75 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $72.19 per cwt, eastern Cornbelt $72.44 per cwt, Iowa-Minnesota $72.16 per cwt and nation $72.15 per cwt.

Slaughter this week under Federal Inspection was estimated at 1828 thousand head, up 6.2 percent from a year earlier.

Sow slaughter for the week ending May 17 was up 11.1 percent compared to a year earlier. Hopefully the reduction in sow and gilt slaughter was just a blip. We believe hog producers are again reducing the herd at a relatively slow rate.

The average weight of barrows and gilts in Iowa-Minnesota for the week ending May 24 at 262.7 pounds was 0.1 pound below a week earlier and 3.1 pounds below a year earlier. It now looks like producers have successfully pulled marketings forward, and the odds appear high for weights to stay below a year earlier.