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April a Profitable Month for Market Hogs

by 5m Editor
10 May 2010, at 5:41am

US - Are this week’s hog prices the highest ever? Because of changes in price reporting systems (and my limited data), it is difficult to say exactly when hog prices were the highest, write Ron Plain and Glenn Grimes in their weekly Hog Outlook report.

During the week ending on 2 June 1990, the terminal market live price for barrows and gilts averaged $64.59/cwt. The 51-52 per cent lean live price averaged $63.30/cwt for the month of August 1996. The Mandatory Price Reporting system (MPR) daily peak was $67.80/cwt on a live basis and $86.83/cwt on a carcass basis, both on August 11, 2008. Wednesday’s national MPR average price for barrows and gilts bought on a live weight basis was $69.22/cwt and the average carcass price was $86.43/cwt.

John Lawrence at Iowa State University estimates the average market hog was sold at a profit of $29.39 per head in April. That makes April the most profitable month since August 2006 and only the fourth profitable one in the last 31 months. Dr Lawrence estimates cost of production at $50.91/cwt live, the lowest since December 2007.

Cash receipts from US hog sales totaled $14.4 billion last year, down $1.7 billion from 2008 according to USDA/NASS. The top three states (Iowa, North Carolina and Minnesota) accounted for 55.3 per cent of cash receipts. The top 10 hog states had 86.6 per cent of the total cash receipts from hog sales.

USDA’s Thursday afternoon calculated pork cutout value was $90.10/cwt, down 10 cents from the previous Thursday, but up $31.52 compared to the same day last year. Loins were higher this week but hams and pork bellies were lower. The record high pork cutout value was $94.41/cwt on 15 August 2008.

The national weighted average carcass price for negotiated hogs Friday morning was $85.47/cwt, $2.99 higher than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $85.46, western corn belt $85.53, and Iowa-Minnesota $84.52/cwt. The top live hog price Friday at Sioux Falls was $61/cwt, down $2 from the previous Friday. Peoria topped at $58 on Friday and Zumbrota, MN had a top price of $60. The interior Missouri live top Friday was $61.75/cwt, $3.75 higher than the previous Friday.

This week’s hog slaughter totaled 1.992 million head, down 1.8 per cent from the week before, and down 1.2 per cent compared to the same week last year. This was the first non-holiday week with slaughter below 2 million head since July.

The average carcass weight of barrows and gilts slaughtered the week ending April 24 was 202 pounds, 1 pound heavier than a year ago. Iowa-Minnesota live weights last week averaged 270.5 pounds, up 0.6 pounds from the week before and up 0.9 pounds compared to a year earlier.

The May lean hog futures contract ended the week at $88.50/cwt, down $1.02 from the previous Friday. The June contract settled at $85.52, down 80 cents for the week. July closed the week 20 cents lower at $86.02/cwt and August ended the week at $86.30/cwt.