Weekly Review: Packers Get Aggressive Again

by 5m Editor
14 February 2009, at 7:54am

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

Feeder pigs at United Tel-O-Auction this week were about $10 per cwt below four weeks earlier. The United pigs by weighted groups were: 50-60 pounds $91-113 per cwt and 60-70 pounds $84 per cwt.

The prices for the US last week shows 50-54 per cent lean 10 pound basis pigs between $39-40 per head and 50-54 per cent lean 40 pound basis a little over $59 per head average.

The average weight of barrows and gilts in Iowa-Minnesota live last week at 269 pounds up 0.3 pound from a week earlier and up 0.9 pound from a year earlier. Carcass weights at 201 pounds under Federal Inspection for the week ending 24 January were the same as a year earlier. For the week ending 31 January carcass weights at 202 pounds up two pounds from 12 months earlier.

These data continues to indicate producers slowed marketings relative to a year earlier. In August, live barrow and gilt were as much as three pounds below a year earlier. This change in weights suggests producers have backed up marketings between one to two days since late summer.

Packers have been very aggressive again this week in buying hogs Thursday the afternoon cutout was $58.54 per cwt and the western Cornbelt negotiated base price was 61.40 per cwt. This means they had only a portion of the drop to pay their entire slaughter and processing costs, which means red ink.

The live hog price Friday morning were $0.50-2.00 per cwt higher compared to a week earlier. The weighted average negotiated carcass prices Friday morning were $2.88-8.99 per cwt higher compared to seven days earlier.

The live prices Friday morning for select markets were: Peoria $3.65 per cwt, Zumbrota, Minnesota, $40 per cwt and interior Missouri $41 per cwt. The weighted average negotiated carcass prices Friday morning by areas were: western Cornbelt $62.05, eastern Cornbelt $55.83 per cwt, Iowa-Minnesota $62.09 per cwt and nation $58.61 per cwt.

We still believe the odds are high for the normal seasonal increase in hog prices this spring. In the past five years the increase in price from February to June has been about $8 per cwt live or nearly $11 per cwt in carcass.

Slaughter this week under Federal Inspection was estimated at 2,236 thousand head, up 0.7 per cent from a year earlier.