US Pork Demand Index Down Again in May

US - USDA will release their June hogs and pigs report on Friday, report Glenn Grimes and Ron Plain in their weekly Hog Outlook report.
calendar icon 21 June 2010
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My forecast is that they will say the breeding herd is 3.7 per cent smaller, the market herd is 3.3 per cent smaller, and the total herd 3.4 per cent smaller than in June 2009.

The retail price of pork in grocery stores averaged $3.043 per pound in May. That was up 12.4 cents from April and up 8.9 cents compared to May 2009. All of the year-over-year increase was passed to producers. The marketing margin was 26.1 cents smaller this May than last. The average live price of hogs last month was $63.13/cwt up $19.95 compared to May 2009 and the highest monthly average since August 1996.

Our pork demand index was down again in May. The retail pork price, adjusted for inflation, was up 1 per cent compared to May 2009. That should have produced less than a 1 per cent drop in domestic pork consumption. But, per capita consumption appears to have been down 7 per cent in May. The economic recovery is yet to impact meat demand.

The cash hog market was highly volatile at the end of the week with the western corn belt morning average up $6.73 on Thursday and down $5.13 on Friday. Apparently, a least one packer was caught short on hogs.

The national weighted average carcass price for negotiated hogs Friday morning was $77.62/cwt, $5.41 higher than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $78.09, western corn belt $75.79, and Iowa-Minnesota $77.28/cwt. The top live hog price Friday at Sioux Falls was $55/cwt, up $2 from the previous Friday. Peoria topped at $51 on Friday and Zumbrota, MN had a top price of $54. The interior Missouri live top Friday was $54.25/cwt, $1.50 higher than the previous Friday.

Pork cutout value declined for the third week in a row. USDA's Thursday afternoon calculated pork cutout value was $82.78/cwt, down 84 cents from the previous Thursday. Loins, hams, and butts were lower this week while bellies were slightly higher.

This week's hog slaughter totaled 2.011 million head, down 0.7 per cent from the week before and down 2.9 per cent compared to the same week last year.

The average carcass weight of barrows and gilts slaughtered the week ending 5 June was 202 pounds, up 1 pound from the week before and up 2 pounds compared to a year ago. Iowa-Minnesota live weights last week averaged 271 pounds, up 2.0 pounds compared to a year earlier. Look for hot weather to start to pull weights down.

The July lean hog futures contract ended the week at $80.87/cwt, up $2.32 from the previous Friday. The August contract settled at $82.65, down $2.30 for the week. October closed the week $1.40 higher at $74.90/cwt and December ended the week at $71.17/cwt.

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