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Weekly Review: Cold Storage Stocks Go Up

by 5m Editor
1 November 2008, at 5:36am

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

Cold storage stocks of pork at the end of September this year were up four percent from a month earlier and up five percent from 12 months earlier. Beef cold storage stocks at the end of last month were up two percent from 30 days earlier but down nine percent from a year earlier. The real bad news is that turkey cold storage stocks at the end of September were up 22 percent from a year earlier. This will be negative for ham prices this fall. Chicken stocks on September 30 were up one percent from a month earlier and up 16 percent from 12 months earlier. These large stocks are due in part to large production but probably mostly due to the weak general economy.

Pork demand at the consumer level for January-September was down 3.8 percent from a year earlier. The weakness is probably due to large competing meat supplies and the weak general economy. The good news for pork producers continues to be the strong growth for live hog demand which was up 8.5 percent for January-September from 12 months earlier. The strong live hog demand is due mostly to the growth in pork exports which appear to have slowed in recent months.

In late October USDA published an abbreviated report, correcting the early October crop data for corn, sorghum, and soybean. This new report reduced the acres of corn harvested by one million acres. Production for this year's corn crop was reduced by 167 million bushels.

The acres harvested of soybean was reduced by 1.1 million acres and production was reduced by 45 million bushel.

USDA revised the estimated corn price up by $0.05 per bushel for the corn marketing year to a midpoint of $4.75 per bushel. They also revised their estimate of soybean by $0.10 per bushel to a midpoint estimate of $10.45 bushel for the 2008-2009 marketing year. The futures market responded early Tuesday by trading higher for both corn and soybean.

The live weight for barrows and gilts in Iowa-Minnesota for the week ending October 25 at 266.2 pounds is the same as a week earlier but still 1.5 pounds below a year earlier. However, barrow and gilt carcass weights for the U.S. at 198 pounds for the week ending October 18 was the same as a year earlier. Both the carcass and live weights indicate marketings are not as current as in early September. For the week ending September 6 live weights were 5.5 pounds below a year earlier and carcass weights were two pounds below a year earlier. These data suggest producers have not kept marketings as current as they were in early September compared to 2007. These data also indicate it is too early to conclude the market hog inventories were overestimated in September.

Pork cutout for Thursday afternoon at $62.37 per cwt of carcass was down $3.99 per cwt from a week earlier, not good news.

Live hog prices Friday morning were $0.75 - 3.00 per cwt lower compared to a week earlier. The weighted average negotiated carcass prices Friday morning were $1.32 to 6.12 per cwt lower compared to 7 days earlier.

The top live prices Friday morning for select markets were: Peoria $35.50 per cwt, Zumbrota Minnesota $38.00 per cwt and interior Missouri $39.50 per cwt. The weighted average carcass prices by areas Friday morning were: western Cornbelt $53.44 per cwt, eastern Cornbelt $52.76 per cwt, Iowa-Minnesota $53.60 per cwt and nation $53.00 per cwt.

Slaughter this week under Federal Inspection was estimated at 2386 thousand head up 3.9 percent from last week and up 3.0 percent from a year earlier.

5m Editor