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Weekly Review: Pork Demand at Consumer Level Up

by 5m Editor
30 May 2009, at 7:59am

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

Retail pork prices in April were down one per cent from March but up two per cent from April of 2008. For January-April pork, prices at retail were up 3.9 per cent from a year earlier. The processor-retailer margin for January-April was up 7.1 per cent from last year. However, the packers' margin was down 7.6 per cent. The producers benefitted some from the higher retail prices with live hog prices up 3.2 per cent from January-April of 2008. However, this modest price increase for hogs was not nearly enough to cover the average cost of producing hogs.

As indicated by the retail price, the demand for pork at the consumer level for home consumption was up 1.3 per cent in January-April compared to 12 months earlier. However, the demand for live hogs was down 3.1 per cent for January-April compared to a year earlier.

Live barrow and gilt weights in Iowa-Minnesota at 268.1 pounds last week were down 1.1 pounds from a week earlier but up 5.4 pounds from a year earlier. Barrow and gilt carcass weights under Federal Inspection for the week ending May 16 at 201 pounds were up 4.0 pounds from a year earlier. Barrow and gilt carcass weights have been 3-4 pounds per head above last year since mid April. There is no question that marketings are not as current as a year ago by approximately two days.

Feeder pig prices last week were $2-5 per head lower than a week earlier. The 10 pound basis pigs weighted average was $39.46 per head.

The weighted average price per head with a formulated price for 10-pound-basis pigs was $35.08, per head and the cash or spot market for 10-pound pigs was $18.57 per head. The weighted average formulated price for 40-pound pigs was $56.41 per head while the cash price for 40-pound pigs was $38.71 per head.

Pork product cutout Thursday afternoon at $59.66 per cwt was down $0.22 per cwt from a week earlier. Loins at $79.80 were up $2.16 per cwt, Boston butts at $61.37 per cwt were down $5.15 per cwt, hams at $40.39 per cwt were down $4.21 per cwt and bellies at $77.29 per cwt were up $6.02 per cwt from seven days earlier.

Top live hog prices Friday morning were $1.50 lower to $1.00 per cwt higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $1.26 - $3.67 per cwt higher compared to seven days earlier.

The top live prices for select markets were: Peoria $34.00 per cwt, Zumbrota, Minnesota, $39.00 per cwt and interior Missouri $39.50 per cwt. The weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $58.44 per cwt, eastern Cornbelt $56.15 per cwt, Iowa-Minnesota $58.45 per cwt and nation $57.73 per cwt.

Slaughter this week under Federal Inspection was estimated at 1804 thousand head, down 1.2 per cent from a year earlier.

Pork product prices cannot get any traction to move higher. Even though demand for pork at the consumer level was up over one percent for January-April, here in May it appears to be weaker than a year earlier. How much summer rally we will eventually get is uncertain at the present time, and we cannot rule out that the flu episode will ruin any seasonal increase.