Glenn Grimes & Ron Plain
University of Missouri - Columbia
We continue to be worried about demand for pork and live hogs. Demand for all meats this year other than broilers is down from a year earlier. For January-November, pork demand at the consumer level was down 4.7 percent, beef down 2.9 percent and turkey down 9.1 percent from 12 months earlier.
For September-November, pork demand was down 6 percent and beef demand was down 4.7 percent from a year earlier. The good news for producers is that demand for live hogs and fed cattle was much better than the demand for meat at the retail level. Live fed cattle demand for Jan-uary-November of 2005 was up 0.1 percent and for hogs was down only 0.5 percent from the same months in 2004.
The September-November period does look better than the 11-month data for live fed cattle demand. For the three months of September-November, live fed cattle demand was up 2.4 percent from 2004 but live hog demand was down about 3 percent.
However, live hog demand for Sep-tember-November was up over 11 percent in 2004 compared to 2003. For this same period in 2004, live fed cattle demand was down from a year earlier.
USDA came out with the January crop production and use data on Thursday, January 12. Even though the size of both the corn and bean crop was increased along with larger carryover stocks, they also increased the 2005-2006 market year price for both corn and beans. We would guess that USDA concluded they had the price estimates too low in December.
Even though the price for corn and beans may be a little higher than expected in December, they are still positive for the hog industry.
Slaughter continues to run very large with above 400,000 killed daily for several days this week.
With this large slaughter, prices came under strong downward pressure. Not only is slaughter large but weights are at record high levels.
For the week ending January 7, barrows and gilts in Iowa-Minnesota averaged 273.8 pounds - 2.3 pounds above the previous high. For the week of the 7th, barrows and gilts were 4.9 pounds above a year earlier.
We do not know whether we have backed some hogs up or the mild weather has contributed to faster rates of gain.
Top cash prices live Friday morning were $2 to $6.50 per cwt. below a week earlier. The top cash prices Friday morning were: Peoria $35 per cwt., St. Paul $35 per cwt. and interior Missouri $37.25 per cwt.
Weighted average base carcass prices this Friday morning were $1.11 to $5.52 below seven days earlier. The carcass prices by area were: western Corn Belt $51.51 per cwt., eastern Corn Belt $54.33 per cwt., Iowa-Minnesota $52.06 per cwt. and nation $52.81 per cwt.
Slaughter this week under Federal Inspection was estimated at 2,067,000 head up 1.6 percent from a year earlier.
Published in the January 18, 2006 issue of Farm World.