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Weekly Review: Substantial Decline in Growth Rate

by 5m Editor
18 October 2008, at 7:37am

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Pork exports continued to grow during August but the rate of growth was down substantially from the growth through June and July. In August, pork exports were up 55.6 percent from last year. Pork imports for August were down 22.9 percent from 2007. The cash hog market in September and October indicates pork export growth slowed from August.

For January-August, pork exports were up 68.9 percent from a year earlier and pork imports were down 16 percent from 2007.

Net pork exports as a percent of production increased from 8.7 percent in August of 2007 to 17.4 percent of production in 2008. For January-August, net pork exports as a percent of production in 2007 was 9.1 percent, a year later the net pork exports had grown to 17.9 percent. These changes in pork trends are the major reasons why live hog demand for January-August was up 7.6 percent with consumer demand for pork down 4.9 percent.

Live hog imports from Canada for January-August were up three percent from a year earlier. Feeder pig imports were up and slaughter hog imports were down for January-August of 2008 compared to 2007.

The value of pork exports in August per hog amounted to $39.53 this year and $23.78 a year earlier. For January-August, the value of pork exports this year was $36.34 per head compared to $24.49 per head in the same month of 2007.

The value of pork exports plus pork variety meats exports at $47.90 per head for August of this year and $27.27 in August last year. In January-August last year the value of pork exports and pork variety meats was $28.00 per hog slaughter. For the same eight months this year the value per hog slaughtered was $42.11 for exports of pork and pork variety meats.

Hog slaughter in recent weeks indicated the possibility that the September Hogs and Pigs overestimated the number on farms of market hogs weighing 120-179 pounds. However, we cannot rule out that we have not backed some hogs up in the last few weeks. The live weights of barrows and gilts in Iowa-Minnesota for the week ending October 11 at 265.8 pounds per head were down 0.1 pound from a week earlier and down 2.1 pounds from a year earlier. But for the week ending September 6 the average live weights of barrows and gilts were 5.5 pounds below a year earlier. These weights have consistently grown closer to a year earlier in the past five weeks. This data supports the trade report that markets have become less current in recent weeks.

Pork cutout per cwt of carcass was pushed lower again this week with the cutout Thursday afternoon at $65.22 per cwt down S3.61 per cwt from a week earlier. Loins at $88.92 per cwt down $3.66 per cwt, Boston butts at $69.54 per cwt down $0.04 per cwt, hams at $47.47 per cwt down $9.78 per cwt and bellies at $74.75 per cwt down $1.23 per cwt from seven days earlier.

The live prices for barrows and gilts this Friday morning were $3.75 to $6.00 per cwt lower compared to last week. The weighted average carcass prices under negotiated trade were $3.07 to $4.50 per cwt lower compared to seven days ago.

The live pries for select market were: Peoria $37.50 per cwt, Zumbrota, Minnesota, $42.00 per cwt and interior Missouri $43.00 per cwt. The weighted average carcass prices for the negotiated trade by areas were: western Cornbelt $60.52 per cwt, eastern Cornbelt $56.78 per cwt, Iowa-Minnesota $60.54 per cwt and nation $58.31 per cwt. Additional weakness in hog prices is expected in coming weeks.

Slaughter this week under Federal Inspection was estimated at 2348 thousand head up 0.8 percent from a year earlier.

5m Editor