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Unemployment, declining GDP hurt demand for meat
 
Last week’s numbers on the U.S. economy are not encouraging for meat demand. The nation’s gross domestic product declined by 0.1 percent in the fourth quarter of 2012. January’s unemployment rate was 7.9 percent, up 0.1 from December. The number of Americans working is still 3.2 million below the pre-recession peak. U.S. meat production is expected to be 1.3 percent less than last year which will mean higher livestock prices, if consumers can afford to pay the higher grocery store price for meat.

USDA’s January cattle inventory report lowered their estimate of the 2012 calf crop by 221,000 head to 34.279 million, the smallest since 1949.

Thursday afternoon’s calculated pork cutout value was $85.04 per cwt., up 34 cents from the previous Thursday. Loin and belly prices were higher, but hams and butts were lower. The pork cutout value is 9 cents per cwt., higher than a year ago. The national average hog carcass price this morning is 98.3 percent of the cutout value.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $83.59 per cwt., up 27 cents from last Friday. The Eastern Corn Belt this morning averaged $83.53 per cwt. The Western Corn Belt and Iowa-Minnesota both averaged $85.87 on the morning price report. The east-west price spread was wide most of the week.

Both Peoria, Ill., and Zumbrota, Minn., had a live top of $58 per cwt., on Friday. The top for interior Missouri live hogs Friday was $59.25 per cwt., unchanged from the previous Friday.

Hog slaughter last week totaled 2.176 million head, up 1.1 percent from last week and up 2.1 percent compared to the same week last year. Total barrow and gilt slaughter during the last nine weeks is quite close to what was predicted by the December inventory report.
The average barrow and gilt live weight in Iowa-Minnesota last week was 275.1 pounds, up 0.2 pound from a week earlier but down 0.4 pound from a year ago.

Friday’s close for the February lean hog futures contract was $87.65 per cwt., up 83 cents from the previous Friday. April hog futures ended the week 17 cents lower at $88.75 per cwt. May hogs settled at $96.60 per cwt.; June hogs at $97.50 per cwt.

Corn and soybean meal futures both ended this week higher than last.

Readers with questions or comments for Ron Plain or Scott Brown may write to them in care of this publication.
2/7/2013