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Prices rallied sharply with week’s small hog slaughter
Hog Outlook
Glenn Grimes & Ron Plain
University of Missouri - Columbia

Live barrow and gilt weights dropped sharply in Iowa-Minnesota last week. According to the USDA, average live weights in Iowa-Minnesota dropped to 268.1 pounds for the week ending April 15. The prior week’s weight average was 270.2 pounds.

The barrow and gilt weight data is a sample and there is some question about how accurate last week’s report may be. At least one packer in the area weights did not decline last week from the prior week.

If the weight decline did occur as reported, it indicates marketings became substantially more current last week. This week’s price rally in hogs support the decline.

Retail pork prices for March declined 1.2 percent from February and 1.7 percent from March 2005. First quarter 2006 retail prices were 2 percent below first quarter of 2005.

Everyone in the hog industry, including consumers, were better off the first quarter of 2006 than in 2005, except for producers.

The total marketing margin was up 5.7 percent in January-March of 2006 than 12 months earlier. The processor-retailer margin for 2006 was up 6.3 percent and the packers margin was up 3.1 percent and consumer prices were 2 percent lower for this period this year compared to 2005.

There is no question that we lost some live hog demand in early 2006 compared to 2005. Pork production was up about 3 percent and live prices were down 18 percent in current dollars. In deflated prices, the decline was between 21 percent and 22 percent.

The Canadian Interaction Trade Tribunal (CITT) has completed its investigation into the dumping and subsidizing of unprocessed corn grain exported by the United States.

According to the finding (release on April 18) “the CITT hereby finds that the dumping and subsidizing of the aforementioned product originating in or exported from the United States have not caused injury and are not threatening to cause injury to the domestic industry.”

This is good news for the Canadian hog industry.

Hog slaughter for the week ending April 8 was revised up to 2.012 million head. However, this is not a record weekly slaughter under Federal Inspection in April. In 1980, the last two weeks of the month was above the number for the week of April 8.

Hog slaughter this week was the smallest since the Christmas-New Year’s week. How much of the decline was due to a seasonal decline and how much was due to Easter Monday is not clear at this time.

The good news is that prices rallied sharply. Cash top prices Friday morning were up $5.50 to $6.75 per cwt. compared to a week earlier.

These prices on Friday morning for select markets were: Peoria $40 per cwt., St. Paul $42 per cwt. and interior Missouri $43.25.

Weighted average negotiated prices for carcasses by area for Friday morning were: western Corn Belt $60.24 per cwt., eastern Corn Belt $57.25 per cwt., Iowa-Minnesota $60.56 per cwt., and nation $58.89 per cwt.

Slaughter this week under Federal Inspection was estimated at 1,925,000 head - down 2.2 percent from a year earlier.

This farm news was published in the April 26, 2006 issue of Farm World.