Since Sept. 1 barrow and gilt slaughter has averaged roughly 0.7 percent above the level implied by the September market hog inventory. That report implies December daily hog slaughter would be down 1.2 percent.
Thus far in 2012, barrow and gilt slaughter is up 2 percent compared to last year. Sow slaughter is down 0.6 percent despite a slight increase in cull sow imports from Canada.
This data implies modest growth in the breeding herd. Our gilt slaughter data indicates the breeding herd was declining in late summer and early fall when corn prices were climbing. The last few weeks imply some herd growth.
This was the week for hog and pork prices, but it is ending on a down note. The Thursday afternoon calculated pork cutout value was $85.15 per cwt., up 96 cents from the previous Thursday. Hams and butts were lower, but loins and bellies were higher this week. The pork cutout value is $4.15 per cwt., lower than a year ago.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.85 per cwt., up $1.09 from last Friday. The Eastern Corn Belt was $1.56 higher than last Friday at $82 per cwt. Neither the Western Corn Belt nor Iowa-Minnesota had enough early morning sales for a price quote. Peoria, Ill., had a top live price this morning of $54 and Zumbrota, Minn., had a live top today of $55 per cwt.
The top for interior Missouri live hogs Friday was $60 per cwt., up $2.75 from the previous Friday.
The average hog carcass price is 96.1 percent of the cutout value, which is quite high for this time of year. Don’t be surprised if packers slow buying early next week to try to restore their profit margins.
Hog slaughter this week totaled 2.364 million head, down 1.5 percent from the week before, but up 1.5 percent compared to the same week last year. Year-to-date hog slaughter is 1.9 percent above 2011.
The average barrow and gilt live weight in Iowa-Minnesota last week was 275.2 pounds, 0.8 pounds above a week earlier, but down 1 pound from a year ago. This was the 10th consecutive week with weights under the year-ago level.
Friday’s close for the December lean hog futures contract was $82.30 per cwt., down $1.77 from the previous Friday. February hog futures ended the week $3.45 lower at $83.47 per cwt. April hogs settled at $88.47 per cwt.; June at $98.20 per cwt.
The views and opinions expressed in this column are those of the authors and not necessarily those of Farm World. Readers with questions or comments for Ron Plain or Scott Brown may write to them in care of this publication.