USDA revised their estimate of corn use for the current market year. They increased feed use by 50 million bushels decreased amount used to produce ethanol by 300 million bushels and decreased exports by 100 million bushels. The bottom line is an increase in carryover stock by 350 million bushels. The current market year price estimate is $3.65-4.85 per bushel down from $4.00-4.80 a month earlier.

For soybeans USDA December estimate shows crush down 30 million bushels, exports up 30 million bushels this leaves carryover stock the same as the November estimate. Soybean meal price forecast for December was $240-300 per ton down $15 per ton from the November estimate.

These lower grain prices are positive for the hog industry. If the weak general economy does not weaken pork demand too much, 2009 should be breakeven to a little profit for the average cost hog producer.

As indicated last week exports of pork continues to be the bright spot for the hog industry. For January through October net exports as a percent of production increased from 9.3 percent in these 10 months in 2007 to 18.9 percent in 2008.

The value of pork and pork variety meats exports increased from $28.22 per hog slaughtered in 2007 to $42.52 in 2008.

Retail pork prices in November declined 0.8 percent from October but were up 4.9 percent from November 2007. For January-November retail pork prices were up 1.4 percent from a year earlier.
All segments of the pork industry benefited from these higher retail prices. The processor-retailer manager was up 1.9 percent the packer’s margin was up 6.6 percent and the producers’ price was up 1.6 percent in January-November from 12 months earlier.

Barrow and gilt weights in Iowa-Minnesota last week at 268.3 pounds were down one pound from a week earlier and down 0.9 pound from a year earlier. However, barrow and gilt carcass weights were two pounds below a year earlier for the week ending November 29. Even though we appear to be more current with marketing then a year earlier we probably are not as current as were in late summer.

Pork product prices were pushed lower this week with the cutout on Thursday afternoon at $57.82 per cwt. down $2.45 per cwt. from a week earlier.

Top live hog prices Friday morning were $0.75-1.30 per cwt. lower compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $1.09-4.06 per cwt. lower compared to seven days earlier.

The top live prices Friday morning were: Peoria $36.50 per cwt., Zumbrota, Minnesota, $ N/A per cwt and interior Missouri $38.75 per cwt. The weighted average negotiated carcass prices by area Friday morning were: western Corn Belt $49.77 per cwt., eastern Corn Belt $52.69 per cwt., Iowa-Minnesota $49.76 per cwt. and nation $52.29 per cwt.

Slaughter this week under Federal Inspection was estimated at 2.379 million head, down 3.7 percent from a year earlier.
Feeder pig prices were basically steady this week at united Tel-O-Auction compared to two weeks earlier. All of the pigs weighted between 50-60 pounds and sold from $90 to $111 per cwt.

December 31, 2008