|March came in like a lion with a lot of ice, snow and wind for the upper Midwest. Hog slaughter was sharply curtained on Thursday and Friday of last week resulting in some uneven pricing.
The week ended with hog prices steady to $2 lower than seven days earlier. The top price on March 2 at Peoria was $41 per cwt. St. Paul and Sioux Falls had no Friday price reports because of snow. The interior Missouri top was $43 on Friday, down $1 for the week.
The national weighted average carcass price Friday morning for negotiated hogs was $61.08 per cwt., $1.24 lower than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $60.90, western corn belt $62, and Iowa-Minnesota $62.29 per cwt. Hog prices are roughly $1 higher than at this time last year. Hog prices got no help from the cutout value which also dropped this week. The March 1, USDA-calculated cutout value was $67.42 per cwt., down $1.98 from the previous week. Pork loins and Boston Butts were sharply lower, bellies higher and hams steady.
The early week trade forecast was that this week’s hog slaughter would be up 2 percent compared to the same week last year. However, snow held the week’s total to only 1.896 million hogs, down 4.4 percent compared to the same week in 2006. Look for some big runs, and lower prices, early next week as packers catch up on the backlog of market ready hogs.
Mild weather in late February increased hog movement and put hog prices on a downward path. The average live weight of barrows and gilts in Iowa-Southern Minnesota for the week ending February 24 was 268.6 pounds, up 1.4 pounds from the week before but still 0.9 pound lighter than the same week in 2006. With corn nearly double year-ago prices, slaughter weights should remain below those of last year.
Since Dec. 1, hog slaughter has averaged 0.6 percent higher than the same period last year.
This is slightly below the 1.1 percent increase indicated by the December inventory report. Imports of slaughter hogs from Canada have been 8 percent higher than last winter.
Slaughter of U.S.-raised hogs since Dec. 1 is only up 0.4 percent compared to last year. Feeder pig imports during December-February were up 5 percent compared to the same months last year.
Sow slaughter this winter was 5 percent higher than a year ago. Given this and $4 corn, it appears likely that the sow herd is slowly shrinking. We expect the breeding herd inventory in USDA’s March hogs and pigs report to be close to even with March 2006.
The number of litters farrowed this winter was forecast to be up 2.2 percent, so the March 1 market hog inventory should be higher than last year.
The April lean hog futures contract ended the week at $66.35 per cwt., down 40 cents from Feb. 23. The June contract settled at $76.90 today, up 50 cents for the week. August closed the week at $76.37 per cwt. and October settled at $69.35.