Corn prices and cost of production were also record high, so 2011 profits were far from record levels. The average farrow-to-finish operation had six months of profit and six months of losses in 2011. Fortunately, the profitable months outweighed the unprofitable ones such that the average producer had a profit of roughly $5 per head marketed in 2011.

USDA's December hogs and pigs report said the swine breeding herd was 0.4 per cent larger than a year earlier and the market hog inventory was 1.7 per cent larger. My interpretation of the data is that 2012 hog slaughter will be up 1.9 per cent and pork production will be up 2.4 per cent. I am forecasting the average live weight price of barrows and gilts at $65/cwt in 2012 ($86/cwt carcass). I am counting on a much reduced beef supply to allow pork packers to buy more hogs at the same price as in 2011. Given today's corn and soybean meal futures prices, it looks like 2012 will yield another small profit for hog producers.

Hog prices were lower this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $78.23/cwt, down 95 cents from last Friday. There were no Friday morning price quotes for the western corn belt or for Iowa-Minnesota. The eastern corn belt averaged $77.82/cwt. Friday's top live hog price at Peoria was $54/cwt. The top for interior Missouri live hogs was $58/cwt, down $1.25 cents from the previous Friday.

Seasonally, both daily hog slaughter and average market weights tend to be lower in January than December. January hog prices have been higher than in December for 11 of the last 15 years. The average in live price is $1.20 higher.

USDA's Thursday afternoon calculated pork cutout value was $86.03/cwt, down 14 cents from the previous Thursday. Loins and butts were lower; hams and bellies higher. This week's pork cutout is the lowest since January. Hog prices this morning are 91 per cent of cutout, a bit high for this time of year.

Hog slaughter totaled 1.967 million head this week, down 8.7 per cent from the week before, but up 2.2 per cent compared to the same week last year. Barrow and gilt carcass weights for the week ending December 17 averaged 205 pounds, down 1 pound from the week before, but unchanged from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 275.7 pounds, up 0.5 pound from the week before and up 1.4 pounds compared to last year. For the year, hog slaughter was up 0.6 per cent and pork production was up 1.5 per cent.

Today's close for the February lean hog futures contract, $84.30/cwt, was down $1.55 from the previous Friday. The April lean hog futures contract settled at $87.70/cwt, off $1.27 for the week. May hogs settled at $94.82/cwt. June hogs ended the week at $95.50/cwt.