Record Pork Retail Prices in September

US - Retail pork prices were record high during September for the second consecutive month, writes Ron Plain in his Weekly Outlook report. Pork in grocery stores averaged $3.561 per pound, up 4.9 cents from August and 26.1 cents higher than in September 2010.
calendar icon 24 October 2011
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The US dollar reached a record low against the Japanese yen this week with only ¥76 needed to buy a dollar. The dollar is the weakest against the Chinese yuan of anytime since 1993. A weak dollar helps boost US exports and makes imports more costly. Both US beef and pork are expected to set annual export records this year.

Domestic meat demand was soft this summer but export demand was very strong leaving packer demand for hogs and cattle up compared to the summer of 2010.

Calculations by Shane Ellis at Iowa State University estimate the typical Iowa farrow-to-finish operation lost $2.65 for each hog sold during September. September was the first unprofitable month since January. Cost of production was estimated at $67.75/cwt of live weight, a new record for the eighth consecutive month.

USDA's Thursday afternoon calculated pork cut-out value was $99.40/cwt, up $1.72 from the previous Thursday. Loins were lower. Hams, butts and bellies were higher. Pork cut-out was above $100 on Wednesday for the first time since August. For this time of year, both pork cut-out and hog prices are unusually high.

Hog prices rose this week. The national average negotiated carcass price for direct delivered hogs on the morning report on Friday (21 October) was $91.07/cwt, up $1.05 from the previous Friday. The latest Friday morning price report for the western corn belt was $91.29/cwt with Iowa-Minnesota at $91.57. Eastern corn belt hogs averaged $90.76 last Friday. Friday's top live hog price at Peoria was $62/cwt. Zumbrota's top was $63/cwt. The top for interior Missouri live hogs was $66/cwt, up $1.50 from the previous Friday.

Hog slaughter totalled 2.323 million head this week, the same as last week and down 0.8 per cent from the same week last year. This is the first week with hog slaughter below year-ago since mid August. Barrow and gilt carcass weights for the week ending 8 October averaged 202 pounds, up one pound from the week before and unchanged from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 272.3 pounds, down 0.4 pounds from the week before and down 1.7 pounds compared to last year.

The Friday close for the December lean hog futures contract, $89.65/cwt, was down 42 cents from the previous Friday. The February lean hog futures contract settled at $92.02/cwt, down 53 cents from the previous Friday. April gained 30 cents this week to settle at $94.75/cwt. The cash equivalent of the lean hog futures closes for December and February are higher than the cash market has ever been for those months.

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