Glenn Grimes & Ron Plain
University of Missouri - Columbia
There is still a seasonality to the number of hogs slaughtered in the United States. The smallest quarterly percentage of annual U.S. hog slaughter is now in the second quarter. However, the smallest average daily pork production is still in July.
Even though we still have a seasonal pattern to hog production, it has been moderated in recent years. In the 1970s, daily pork production increased 30 percent from July to November. In the 1980s, the increase from July to November was 24 percent. In the 1990s, the increase for the above dates was 20 percent and for 2000-2004 the increase was only 15 percent.
However, the decline in barrow and gilt prices from July to November has widened rather than narrowed. In the 1970s, the decline in barrow and gilt prices from July to November was 11 percent. In the 1980s, the decline was 13 percent. In the 1990s, the decline from July to November was 20 percent and for 2000-2004 the decline has remained at 20 percent.
The pork industry, through the pricing system, is telling hog producers they want the same number of hogs throughout the year. Unfortunately, nature makes it difficult if not impossible to produce the same volume of hogs through the entire year.
Fifty years ago the seasonal high in hog prices occurred most often in August; then it moved to July and for 1995-2004 June has been the month on average with the highest prices. However, the high in seasonal hog prices now occurs some years in May. There is a fairly good chance that has occurred in 2006. But, we are not ready yet to concede that we have already had the high in slaughter hog prices until we get at least through June.
The weak demand for meats appears to have caught up with young chickens for January-April. One caution about young chicken demand is the uncertainty about the amount of chicken exports to Russia in April of this year. Remember, over 31 percent of our poultry exports for January-March of 2006 were to Russia.
Our calculations show young chicken demand for January-April was down over 5 percent at the consumer level.
The live weight of barrows and gilts in Iowa-Minnesota last week declined 1.3 pounds per head from a week earlier and stayed below a year earlier for the second week since September of 2005.
Marketings are quite current at least in the Midwest based on these weights.
Cash negotiated hog prices were basically steady to higher in this holiday-shortened week.
Top cash prices Friday morning were $1 per cwt. higher with a week earlier. Weighted average carcass prices Friday morning were $0.72 per cwt. lower to $2.65 per cwt. higher compared to Friday last week.
The top live prices Friday morning for select markets were: Peoria $43 per cwt., St. Paul $47 per cwt., Sioux Falls $46 per cwt. and interior Missouri $46.75 per cwt.
The weighted average carcass prices Friday morning by area were: western Corn Belt $66.49 per cwt., eastern Corn Belt $64.51 per cwt., Iowa-Minnesota $66.56 per cwt. and nation $65.48 per cwt.
Slaughter of hogs under Federal Inspection this holiday-shortened week was estimated at 1,668,000 head, up 0.9 percent from a year earlier.
This farm news was published in the June 7, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.