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January imports surge, Canada benefits.

by 5m Editor
12 April 2003, at 12:00am

US Weekly Hog Outlook, 11th April 2003 - Weekly review of the US hog industry, written by Glen Grimes and Ron Plain.

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Retail pork prices in February were up 1.7 percent from January but down 3.3 percent from February 2002. Live hog prices were 12.3 percent below a year earlier in February. All of the loss was due to the decline in retail prices. Marketing margins for February were at last year's levels.

Pork exports in January this year were up from 2002 but less than 1 percent. Our exports to Japan were up by less than 1 percent, but our exports to Canada were down over 15 percent, and Mexico purchases declined by 29 percent from a year earlier. South Korean imports of pork from the US in January were up 212 percent from 12 months earlier.

Hopefully, 2003 will be the thirteenth consecutive year for export growth for the US.

The bad news is that our imports of pork in January were up nearly 22 percent. Eighty percent of the import increase in January was from Canada. Almost 84 percent of our pork imports in January were from Canada.

Live hog imports from Canada during January were down 3 percent from 2002. Feeder pig imports were up 8.1 percent, but slaughter hog imports were down over 21 percent from a year earlier.

Some improvement in hog prices developed this week. Prices for live hogs this Friday morning were from steady to $2 per cwt above a week earlier. Average carcass prices for 185 pound carcass with 0.9-1.1 inch back fat, 6 square-inch loin, 2 inches deep were from $0.65 to $2.46 above Friday of last week for the morning negotiated hog price.

The top live prices for select markets were: the average price by areas for carcasses Friday morning were Peoria $33.00, St. Paul $32.50, Sioux Falls $33.50, Internal Missouri $32.50 western Cornbelt $47.10, eastern Cornbelt $47.60, Iowa-Minnesota $47.49 and nation $47.30.

Slaughter this week under Federal Inspection was estimated at 1901 thousand head---down 0.9% from a year earlier. This is the first week this year that slaughter has been below a year earlier. Hopefully, slaughter will be below last year for most weeks through the remainder of 2003. However, the probabilities may be higher than we want for slaughter to at least hold close to last year for another month or so.

The March Hogs and Pigs report indicates slaughter should average about 2 percent below last year for the next couple of months. If the gilt and sow slaughter data correctly registered when the reduction started in the breeding herd, slaughter will likely stay close to last year and may average as high as last year into mid-May.

Pork loin prices have been quite weak for some time now. In fact, for at least two days in the last week or so, belly prices exceeded loin prices per pound. Is it possible that the industry is reducing the demand for pork loin by adding water? Many observers believe that is the major reason for the weak demand for hams.

5m Editor