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Ron Plain

Slaughter hog numbers continue to run well above expectations. However, since June 1, slaughter is only marginally above expectations based on the June Hogs and Pigs report. There is a possibility that currently about one percent of the overrun in slaughter is due to more slaughter hog imports from Canada. A small Canadian plant --- 18-20,000-head slaughter per week --- has stopped killing due to red ink, and it is believed that most or all of those hogs are coming to the U.S. for slaughter.

For January-May, slaughter hog imports from Canada were down nearly 22 percent from the same period in 2002. This reduction amounts to about 9,400 head on average per week. However, based on weekly data, we may be getting about 17,000 more slaughter hogs per week from Canada this year than during the same period last year. For the past 4 weeks, slaughter has run about 2.5 percent above expectations, based on preliminary data. If we are getting 17 thousand more slaughter hogs per week from Canada than a year earlier, the slaughter would only be about 1.5 percent higher than we expected from domestic supplies, based on the June Hogs and Pigs report.

The mild weather may be contributing to some faster rates of gain than last year for July. However, slaughter weights for live hogs in Iowa-Minnesota last week were 3.5 pounds above the same week in 2002. In early June, the weights were at above last year's level. This indicates marketings at present time are not as current as a year earlier, and we believe the probabilities are very high that weather has not been enough better for rates of gain to contribute an extra 3.5 pounds per head this year than in 2002.

Pork exports for January-May were up 5 percent from the same months in 2002. Our exports to Japan were up almost 9 percent and up over 83 percent to South Korea, which more than offset a 17 percent reduction to Canada and a 15 percent decline to Mexico.

Our imports of pork for the first 5 months of 2003 were up almost 18 percent from a year earlier. Imports for this period were up 17 percent from Canada and up over 25 percent from Denmark.

Live hog imports from Canada for January-May were up 5.7 percent from last year. Feeder pig imports were up 21.6 percent but slaughter hog imports were down 21.9 percent compared to the same months from 2002. But as indicated earlier, slaughter imports at current time may be up from last year.

Cash live prices this Friday were down $0.75 to $2 from a week earlier. The top live cash prices at select markets this Friday morning were: Peoria $38, St. Paul $41, Sioux Falls $40, and interior Missouri $40.

Average carcass prices for 185-pound carcasses with 0.9-1.1 inch back fat, 6 sq. inch loin, 2 inches deep were $0.03 to $0.29 higher compared to last week. These carcass prices by area for Friday morning were: western Cornbelt $57.93, eastern Cornbelt $58.17, Iowa-Minnesota $57.69, and nation $58.19.

Feeder pig prices are coming under more downward pressure now than we expected. There appears to be more than one reason contributing to this decline in pig prices. The big reason is the lower than expected slaughter hog prices.

The number of pigs in United Producers Tel-o-auction this week was too small to get a good market test but 50-60# pigs sold at $46 per cwt, 60-70# pigs also at $46 per cwt and 70-80# at $58 per cwt.

Pork product prices continued under pressure this week with 1/4-inch trim pork loins at $96.38 per cwt at noon Friday---down $4.76 for the week. Ham and prices were also lower than last Friday.

Slaughter this week under Federal Inspection was estimated at 1823 thousand head---up 0.7 percent from the same week in 2002.