Glenn Grimes & Ron Plain
University of Missouri - Columbia
Hog prices dropped early in the week but rebounded on Friday to end the week slightly higher in the west than seven days earlier, but $1.50 per cwt. or so lower in the east.
The top price Friday at St. Paul was $43 per cwt. Peoria’s top was $40. Interior Missouri hogs topped out at $41.75 on Friday, up 75 cents for the week. The national weighted average carcass price Friday morning for negotiated hogs was $60.05 per cwt., $1.01 lower than the previous Friday. Regional average prices on Friday morning were: eastern Corn Belt $59.90, western Corn Belt $60.73, and Iowa-Minnesota $60.98 per cwt.
This week’s prices are above the live hog breakeven price of 39 cents per pound, but $10-12 per cwt. below year-ago levels.
USDA is forecasting 2006 per capita meat supplies will be three pounds more than last year. That shouldn’t be enough to make this year a money loser for hog producers, but industry profits are expected to be smaller.
Last year, the U.S. exported a record $2.3 billion of pork. That equaled $22 for each hog we slaughtered in 2005. The odds appear good that 2006 will be our 15th consecutive record year for pork exports.
This week’s hog slaughter is estimated by USDA at 1.971 million hogs, up 0.3 percent compared to this week in 2005. Since December 1, hog slaughter has averaged 1 percent higher than the same period last year. This is slightly above the 0.5 percent increase indicated by the December inventory report.
February was the 25th consecutive profitable month for hog producers. So, it shouldn’t be surprising that the mix of barrows and gilts in our slaughter sample indicates the sow herd is expanding. Look for the breeding herd to be up 1-2 percent in USDA’s next quarterly inventory survey, which will be released at the end of this month.
Weekly trade data indicate that the number of slaughter hogs imported from Canada in the last three months was down 4 percent compared to December-February 2005, but the number of feeder pigs imported from Canada was up 12 percent. It seems reasonable to expect that relationship, more feeder pigs and fewer slaughter hogs, to hold for much of 2006. Statistics Canada says the Canadian swine breeding herd was slightly smaller at the start of 2006 than a year earlier, so total live hog imports from Canada this year should be fairly close to 2005 levels.
Slaughter weights began 2006 at record levels. Barrow and gilt carcass weights averaged 202 pounds each of the first two weeks of the year. That was 3 pounds heavier than at the start of 2005. In mid-February carcass weights were down to 199 pounds, the same as a year earlier. However, the Iowa-Minnesota live weight series has been steadily running 2-3 pounds heavier than last year.
The April lean hog futures contract ended the week at $62 per cwt., up 58 cents from last Friday. The May contract settled at $68.77 today, up $1.40 for the week. June closed the week at $70.50 per cwt. and July settled at $69.22.
This farm news was published in the March 8, 2006 issue of Farm World.