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Demand for pork, live hogs down in the first three months of 2006
Hog Outlook
Glenn Grimes & Ron Plain
University of Missouri - Columbia

Demand for pork at the consumer level for January-March of 2006 was down 3.5 percent from a year earlier. Live hog demand fared better than consumer demand for this period. Live hog demand for these three months was down only 0.7 percent because of pork exports and population growth.

The consumer demand held quite well when we consider total meat supplies. For January-March 2006, beef production was up 6.2 percent, pork production up 3.6 percent, broiler production up 4.6 percent, and turkey production up 3.6 percent all compared to 2005.

The meat industry is asking consumers to increase meat consumption a large amount when they are facing very high-energy costs.

Cash feeder pig prices at United Tel-O-Auction this week were around $15 per cwt. higher than two weeks earlier. All of the nearby 1,000 pigs weighed between 50 and 60 pounds and sold from $105.00 to $117.50 per cwt.

Average live weights of barrows and gilts jumped back up to 269.5 pounds for the week ending April 22. These weights declined by 2.1 pounds per head the week of April 15, compared to the previous week. Apparently, the decline was due mostly to sample error. Average weights for the week of April 22, were 2.2 pounds above a year earlier. This data suggests marketings were not pulled forward in recent weeks.

Cold storage stocks of pork at the end of March were 5 percent below the end of February 2006, and 8 percent below the end of March 2005.

The good news is that we did not build pork stocks with the low prices in March.

Beef cold storage stocks on March 31 were 14 percent larger than a year earlier. The record cold storage stocks of chicken were reduced during March to 6 percent below February 28 but were still a whopping 29 percent above March 31, 2005. These large poultry stocks will continue to be a drag on the total meat complex.

Hog prices continued to rally seasonally this week with top live prices Friday morning $2 to $3 per cwt. above seven days earlier. Average weighted base negotiated carcass prices Friday morning were $4.33 to $6.51 higher than a week earlier.

The top live prices for selected markets were: Peoria $42 per cwt., St Paul $45 per cwt., and interior Missouri $45.50 per cwt. The average weighted negotiated base carcass prices by areas were: western Corn Belt $66.43 per cwt., eastern Corn Belt $61.58 per cwt., Iowa-Minnesota $67.07 per cwt., and nation $65.54 per cwt.

Slaughter this week under Federal Inspection was estimated at 1,974,000 head, up 2.4 percent from a year earlier.

Some of the increase in slaughter this week was due to a larger Saturday slaughter because of the planned marches about immigration on Monday that will close some plants.

It was announced on Thursday that Russia had stopped all poultry imports. It is not known how long this stoppage will be but some reports indicate only 10-14 days.

About one-third of our poultry exports in tonnage are to Russia. This act is very negative to the U.S. poultry industry and to the total U.S. meat complex.

This farm news was published in the May 3, 2006 issue of Farm World.

5/3/2006