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Hogs and Pigs Report Close to Trade Expectations

by 5m Editor
2 January 2010, at 3:35pm

US - The available data continues to support strong consumer demand for pork, writes Ron Plain in his weekly review of the US hog industry.

For January-November, consumer demand for pork was up 3.1 per cent, for beef down 2.7 per cent, for broilers down 3.2 per cent and for turkey up 4.5 per cent.

Demand for live hogs for January-November was down 4.4 per cent and for live fed cattle down 7.8 per cent. The weaker live animal demand than consumer demand is believed to be due mostly to lower exports for the hog industry, and lower exports and a weak hotel and restaurant trade for the beef industry.

The trade estimate for the total hog inventory on 1 December showed a decline of 2.4 per cent. The breeding herd was down 3.4 per cent and the market herd was down 2.3 per cent. A breeding herd down 3.4 per cent from 2008 would mean producers reduced the herd some from September of 2009.

Feeder pig prices at United Tel-O-Auction this week were $5.00-15.00 per cwt above two weeks earlier. The prices by weight groups were: 50-60 pounds $85.00-96.00 per cwt and 60-70 pounds $88.00 per cwt. The futures prices for lean hogs next year have been very supportive for feeder pigs in recent weeks.

Pork product prices were pushed some lower this week with the cutout at $67.32 per cwt, down $0.54 per cwt from Wednesday a week earlier. Loins at $88.74 per cwt were down $1.77 per cwt, Boston butts at $61.64 per cwt were up $1.04 per cwt, hams at $54.91 per cwt were down $1.58 per cwt and bellies at $77.73 were up $2.13 per cwt from seven days earlier.

Live hog prices Thursday morning were $0.50 per cwt lower to $1.00 per cwt higher compared to a week earlier. Weighted average negotiated carcass prices Thursday morning were $0.03 per cwt lower to $4.72 per cwt higher compared to seven days earlier.

The top live prices for select markets Thursday morning were: Peoria $38 per cwt, Zumbrota, Minnesota, was not available and interior Missouri $43.25 per cwt. The weighted average negotiated carcass prices Thursday morning by area were: western Cornbelt $63.23 per cwt, eastern Cornbelt $58.81 per cwt, Iowa-Minnesota $63.70 per cwt and nation $60.85 per cwt.

The Hogs and Pigs report for December came in relatively close to trade expectations. The total herd at down 1.8 per cent was the biggest difference; the trade estimate was for the total herd to be down 2.4 per cent. The breeding herd was down 3.5 per cent; the trade estimate was for a 3.4 per cent decline. The market herd was down 2.0 per cent; the trade estimate was for a 2.3 per cent decline.

We expect the Iowa-Minnesota base carcass price to be $60.00 or a little more in the first quarter and in the upper $60's to abut $70.00 in the second quarter.

More detail on the report can be found in the quarterly summary report of the Hogs and Pigs report on the AgEBB website.

Hog slaughter through Thursday was estimated at 1,678 thousand head, up 3.5 per cent from a year earlier.

Happy New Year!

Further Reading

- You can view the USDA Hogs and Pigs Report by clicking here.