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Increase in Retail Pork Prices During February

by 5m Editor
20 March 2010, at 8:49am

US - The US and China have reached an agreement to reopen China to US pork, write Glenn Grimes and Ron Plain in their weekly review of the US hog industry.

The Chinese government disrupted shipments last year over H1N1 concerns. The Chinese market has big potential. In 2008, the US shipped over 360 million pounds of pork to China. China currently has high hog numbers and low hog prices, so a sudden surge of US pork into China is unlikely.

Retail pork prices increased during February for the third month in a row. The average price of pork at retail in February was $2.917 per pound. That is 3.9 cents higher than in January, but 4.4 cents lower than in February 2009. Domestic pork demand continues to be weak. Retail pork prices are lower this year even though the domestic pork supply has been below year-earlier levels.

The average live hog price was $6.55/cwt higher in February than 12 months earlier. Since higher hog prices have not been passed through to consumers, they have come out of middlemen’s pockets. That is a good deal for hog producers, but it is not sustainable.

Hog prices dropped lower this week. The national weighted average carcass price for negotiated hogs Friday morning was $66.36/cwt, $3.74 lower than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $66.09, western corn belt $67.23, and Iowa-Minnesota $67.24/cwt. The top hog price Friday at Sioux Falls was $47.50/cwt, down $3.50 from the previous Friday. Zumbrota, MN had a top price of $48 on Friday and Peoria topped at $44/cwt. The interior Missouri live top Friday was $48.25/cwt, $1.75 lower than the previous Friday.

USDA’s Thursday afternoon calculated cutout value was $72.68/cwt, down $1.43 from the previous Thursday, but up $11.88 compared to the same day last year. Loins and hams were lower this week, but bellies and butts ended the week higher.

This week’s hog slaughter totaled 2.166 million head, up 1.6 per cent from the week before and up 0.4 per cent compared to the same week last year. This is the first week above year-ago since New Year’s week. Since 1 December hog slaughter has been 1.5 per cent lower than indicated by the December hog inventory. USDA will release the results of their March hog survey next Friday.

The average carcass weight of barrows and gilts slaughtered the week ending 6 March was 201 pounds, up 1 pound from the week before but down 1 pound from the same week last year. Iowa-Minnesota live weights last week averaged 270.5 pounds, up 1.8 pounds compared to a year earlier. Year-to-date pork production is down 5.8 per cent compared to the same period in 2009.

The April lean hog futures contract ended the week at $73.35/cwt, up 70 cents from last Friday. The May contract settled at $79.90, up $1.95 for the week. June closed the week at $82.57/cwt and July ended at $83.15/cwt.

May corn futures gained 10 cents this week and settled at $3.745 per bushel on Friday.