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| Pork producers faired better with market formula pricing |
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Hog producers who used the other market formula contract to price and sell their hogs since August have faired much better than producers who sold on the spot market or meat and or long market formulas (other market contract is priced on futures market).
The number of producers who used the other market formula amounted to about 10 percent of barrows and gilts slaughtered under Federal Inspection. See table below.
The total number of hogs priced with the other market formula was 5.64 million head. The total dollars gained by using the contract amounted to $120.7 million.
The March 1 Hogs and Pigs report indicated a record slaughter this year of over 116 million head. Our live estimate price for 51-52 percent lean hogs U.S. basis for the year is $40-43 per cwt. live or $54-58 per cwt. of carcass. Our summary of the March Hogs and pigs along with price estimates and slaughter estimates by quarter are in another report on the same website.
Productivity growth based on the current data for the year ending Feb. 29 was 6.2 percent. That compares with an average for the past 5 years at 2.94 percent. We believe the odds are low that we got that much growth last year. We believe the breeding herd was under estimated for most or all of last year.
Sow slaughter for the four-week period ending March 22 was up 7.8 percent after adjusting for breeding herd size. Gilt slaughter is also running at a level that indicates herd reduction.
Use of Other Market Formula
Barrow and gilt slaughter weights for the week ending March 29 at 267.8 pounds per head in Iowa-Minnesota up 0.3 pounds from a week earlier, but down 1.7 pound from a year earlier.
We certainly hope producers will continue to keep weights this much below a year earlier. If so it will reduce pork production some.
Pork cutout this week per cwt of carcass dropped to levels experienced in early 2003.
However, the cutout rebounded in late week. The cutout this Thursday afternoon at 58.37 percent was up $2.22 per cwt. from a week earlier. Loin prices at $76.55 per cwt. up $2.96 per cwt., Boston butts at $58.02 up $2.46 per cwt, hams at $52.39 up $7.95 per cwt. and bellies at $55.13 per cwt. down $5.27 per cwt. from seven days earlier.
Live hog prices this Friday morning were $0.50-$1.00 per cwt. higher compared to last week. Negotiated carcass price per cwt were $10.58 lower to $1.48 per cwt. higher compared to last Friday morning.
The live hog top price at select markets Friday morning were Peoria $30, St. Paul $34 per cwt., and Interior Missouri $35.75 per cwt.
The negotiated weighted average carcass price by area were; western Corn Belt $56.05 per cwt., eastern Corn Belt $50.19 per cwt., Iowa-Minnesota $56.48 per cwt. and nation $52.70 per cwt.
Slaughter this week under Federal Inspection was estimated at 2.286 million head, up 11.4 percent from a year earlier.
This farm news was published in the April 9, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 4/9/2008 |
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