Barrows and gilts continued to grow well with the cooler weather. The average live weights for Iowa-Minnesota were estimated at 264.9 pounds, up 0.7 pounds from a week earlier and up 1.8 pounds from a year earlier.

The September 1, Hogs and Pigs Report to be released September 29, will show some growth in our opinion. We expect the breeding herd to be up 1.2 percent, the market herd up 1.3 percent and the total herd up 1.3 percent from a year earlier.

We believe the number of sows farrowing in June, July and August was up a little with a pig crop up 0.7 percent for those three months. We also expect the farrowing intentions for July, August, and September to show a 1 percent increase and the farrowing interests for October-December to be up 1.3 percent from a year earlier.

We expect this report to show enough growth to continue the increase in pork production through 2007. If we get an increase in pork production in 2007 from 2006 it will be the seventh year for an increase in year-to-year production and the sixth year of consecutive years of record high production. If we still have a production cycle in pork, it has at least lengthened in number of years.

Pork exports for January-July of 2006 were up 12.4 percent from a year earlier. However, exports for July were down 4.1 percent from a year earlier, for the first time since August of 2003. Pork exports in July of 2005 were exceptionally large to Japan and total exports for July were nearly 13 percent above August. Therefore, we believe the probabilities are high for August 2006 exports to be above a year earlier.

Our January-July exports to Japan were down 10 percent, but to Canada were up 6 percent, to Mexico up 25.3 percent, to Russia up 148.4 percent, to South Korea up 52.8 percent, to Hong Kong and mainland China up 11.4 percent, to Taiwan up 23.3 percent, to Caribbean up 94.8 percent, and to other up 1.8 percent.

Our pork imports for January-July were up, but less then 1 percent from a year earlier. Our net exports for January-July were at nearly 10 percent of pork production. Our live hog imports from Canada for the first seven months of 2006 were up 9.3 percent from 2005. Feeder pig imports were up 13 percent and slaughter hog imports were up 1.5 percent from 12 months earlier.

Retail pork prices in August were up 0.3 percent from July and up 1 percent from August of 2005. Retail pork price for January-August were down 1.6 percent from 12 months earlier. The gainers with the larger production and lower retail prices were pork consumers and the marketers. The total marketing margin was up 1.4 percent for these 8 months compared to a year earlier. Live hog prices for January-August were down 8.5 percent, but still averaged $47.29 per cwt. live. The June-August average live hog price was $53.37 per cwt., up 5.7 percent from 12 months earlier with larger slaughters.

Smithfield announced this week that they were purchasing Premium Standard Farms. This would increase Smithfield percentage of the U.S. hog production to about 20 percent or a little more and would increase their share of U.S. barrow and gilt slaughter to 30 percent or a little more.

We do not believe this purchase would have any significant impact on the operation of the U.S. hog industry and could increase the number of hogs traded on the spot market. Morrell Packing Co. and Farmland Foods, both owned by Smithfield, probably purchase a larger percent of their supply on the spot or negotiated market than the average for all packers in the Corn Belt.

Cash live hog prices Friday morning were $1-3 per cwt. lower compared to a week earlier. Weighted average negotiated carcass prices at weekend were $4.62-5.50 per cwt. lower compared seven days earlier. Prices continue to hold quite well with the record high slaughter.

Pork product prices were pushed substantially lower this week. The price per 100 pounds of carcass Thursday afternoon was $68 per cwt., down $4.71 per cwt. from a week earlier.

Slaughter this week under Federal Inspection was estimated at 2,133,000 head, up 1.8 percent from a year earlier.

This farm news was published in the Sept. 27, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.