The September USDA Hogs and Pigs report came in more bullish than trade estimates. Total number was down 2.3 percent, kept for breeding was down 3.1 percent and the market inventory was down 2.2 percent. The futures market responded by showing relatively small gains Monday and Tuesday.

USDA revised upward its estimate of the number of litters farrowed December-February 2009 by 1.5 percent and the pig crop for those months by 1.6 percent. This brought the June market hog inventory more in line with summer slaughters. USDA revised upward the 60- to 170-pound market inventories in June by 0.7 percent.

In recent reports, the USDA has estimated the number a little below the trade estimate but actual marketing on average has been above. We must remember the USDA estimates are based on a sample and the trade estimates are based on other statistics and opinions Both estimates are subject to error.

Our domestic demand index for pork for January-August was up 3.9 percent at the consumer level, but live hog demand was down 4.7 percent for this period compared to a year earlier. The weaker live hog demand than consumer demand was due to 20 percent fewer exports than in 2008.

Pork product cutout this week on Thursday at $54.33 per cwt. was up 70 cents from a week earlier. Loins at $68.51 per cwt. were down $1.15, Boston butts at $50.40 per cwt. were down $2.16, hams at $48.46 per cwt. were up $5.60 and bellies at $66.36 per cwt. were down $1.47, compared to seven days earlier.

Feeder pig prices were $3-$6 per head higher last week. This is the third consecutive week with good gains in feeder pig prices. The average price for 50-54 percent lean 10-pound pigs was $25.89 per head. The average for 50-54 percent lean 40-pound pigs was $28.30.

The formula price for 10-pound pigs was $33.12 per head, and the formula price for 40-pound pigs was $39.31. The cash or negotiated price for 10-pound pigs was $23.29 per head and 40-pound pigs was $27.43.

Live barrow and gilt weights in Iowa-Minnesota last week at 268.5 pounds were up 0.3 pound from a week earlier and up 3.9 pounds from a year earlier. It is believed a substantial portion of the heavier weights this summer has been due to cooler-than-normal temperatures in July and August. If so, we will continue to get weights closer to a year earlier as we go through the fall but weights are likely to continue some above a year earlier.

Unless we can get substantial growth in demand for live hogs, the red ink being experienced by producers will likely continue on average through 2010. Live hog prices Friday morning were 75 cents lower to $1 per cwt. higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were 31 cents to $2.03 per cwt. lower compared to seven days earlier.
The top live prices Friday morning were Peoria, $30 per cwt., Zumbrota, Minn., $32, and interior Missouri, $35. The weighted average negotiated carcass prices Friday morning by area were western Cornbelt $48.39 per cwt., eastern Cornbelt $45.44, Iowa-Minnesota $48.47 and nation $46.09.

Slaughter this week under federal inspection was estimated at 2.329 million head, up 0.1 percent from a year earlier.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Glen Grimes or Ron Plain may write to them in care of this publication.

Published on Oct. 7, 2009