Pork cutout peaked at $94.41 on Monday, August 18, then declined for 12 consecutive trading days to $77.20 or over 18 percent. This was a decline in value of over $34 per hog. The cutout was up slightly on Friday, September 5, but declined $1.49 per cwt of pork on Monday and was at $75.06 per cwt on Thursday afternoon, down $2.14 per cwt from a week earlier.

The odds are high that we have lost some of the export demand. We will have July data next week but all indications showed that export demand stayed strong until mid August. We will not have August information until about mid October. In fact, we may not get the true signals until we get the November releases for September shipments.

Slaughter in the fourth quarter is expected to be up about 2.5 percent from the record slaughter in the fourth quarter of 2007 at nearly 30.4 million head. Slaughter for the 11 full weeks in the fourth quarter will need to average about 2.4 million weekly or only 70 thousand head per week below the record high slaughter of 2470 thousand head last December. Unless we lose a slaughter plant for some reason, we should have enough slaughter capacity to squeak by this fall and early winter without real big problems.

Our preliminary estimate is that the September 1 breeding herd in the U.S. was 96.5 percent of a year earlier.

Pork product prices Thursday afternoon showed loins at $93.64 per cwt were down $3.56 per cwt, Boston butts at $79.78 per cwt were down $3.61 per cwt, hams at $70.32 per cwt were down $2.00 per cwt, and bellies at $175.59 per cwt were down $1.84 per cwt from seven days earlier.

Barrow and gilt weights live in Iowa-Minnesota last week at 259.4 pounds were one pound below a week earlier and a whopping 5.5 pounds below a year earlier. This is the biggest decrease form a year earlier since 1983. Producers are responding to the high feed price by pulling down weights.

Feeder pig prices at United Tel-O-Auction this week were steady to $7.00 per cwt higher than two weeks ago. All of the United pigs weighed between 50 and 60 pounds and sold from $60-$77 per cwt. Live hog prices this Friday morning were steady to $1 per cwt lower compared to a week earlier. Weighted average negotiated carcass price Friday morning were $1.47 to $4.86 per cwt lower compared to seven days earlier.

The top live prices for select markets this Friday morning were: Peoria $46 per cwt, Zumbrota, Minnesota, $48 per cwt, and interior Missouri $49.25 per cwt. The weighed average negotiated price by area were: western Cornbelt $69.25 per cwt, eastern Cornbelt $66.77 per cwt, Iowa-Minnesota $69.57 per cwt and nation $67.91 per cwt.

Slaughter this week under Federal Inspection was estimated at 2306 thousand head, up 3.5 percent from a year earlier.