The per capita supply of red meat and poultry is expected to be lower for the fifth consecutive year; down 2.6 pounds from last year and the smallest since 1997. The forecast is for only 46.7 pounds of retail pork per person, the smallest supply since 1978. The key to how high cattle and hog prices will get this year is what happens with meat demand. If the economy improves, we just might see record hog prices this summer.

The decline in meat supply has been driven largely by red ink caused by high feed costs. Taking corn from $2/bushel to $5/bushel has forced a downsizing of the nation’s herds. Unfortunately, the cost of gain is likely to be record high this year. Both corn and soybean meal are well positioned for new price records in 2011.

The average carcass weight of barrows and gilts slaughtered the week ending 25 December was 204 pounds, down 1 pound from the previous week but 6 pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 274.7 pounds, up 0.4 pounds from the week before and up 6.4 pounds compared to a year earlier.

If USDA’s December hog inventory survey was close to right, 2011 hog slaughter should be down roughly 0.5 per cent compared to last year. Weights are likely to be 1 per cent or so higher, giving us slightly more pork in 2011.

Hog prices ended this week mixed compared to the week before. The national weighted average carcass price for negotiated hogs Friday morning was $71.14/cwt, down 78 cents from the previous week. The average carcass price this morning in the eastern corn belt was $70.48/cwt. The western corn belt averaged $71.95/cwt and Iowa-Minnesota averaged $72.13/cwt this morning. The top live hog price Friday at Sioux Falls was $49/cwt. The top at Zumbrota was $46 and Peoria’s top was $49/cwt. The interior Missouri live top Friday was $49/cwt, steady with last week.

USDA’s Thursday afternoon calculated pork cutout value was $78.14/cwt, up 51 cents from the previous Thursday. Hams were lower this week while loins, butts and bellies were higher.

Hog slaughter totaled 2.189 million head this week, up 13.2 per cent from the week before (which was low because of the New Year’s holiday) and up 4.4 per cent compared to the same week last year (which was light because of snow).

The February lean hog futures contract ended the week at $79.42/cwt, down 33 cents from the previous Friday. The April contract ended the week at $84.05/cwt and June hogs settled at $93.97.

March corn futures ended the week at $5.95/bushel, down 34 cents from the previous Friday. May corn futures ended the week at $6.03’6 and December settled at $5.42/bushel.

March soybean meal closed at $362.70/ton.