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Ron Plain

Slaughter this week was estimated at 2,146 thousand head---up 2.7 percent from a year earlier. Slaughter for the last 6 weeks is up about 2.4 percent from 12 months earlier. Slaughter for these 6 weeks was expected to be down a short 2 percent, based on the September 1 Hogs and Pigs. For the 4 weeks ending October 25th slaughter hog imports from Canada were up enough to amount to about 1.5 percent.

Hopefully we can handle the slaughter number for the 4th quarter, even if it continues at 2.5 percent above last for the remainder of the quarter, without running into slaughter capacity problems. A 2.5 percent increase in 4th quarter slaughter from last year would indicate a slaughter of about 27.4 million head. In 1998, the 4th quarter slaughter was almost 27.6 million head.

We believe we have a little more slaughter capacity now than 5 years ago. Packers have been doing the same thing as producers and keep getting more capacity from the same plants.

Even though the Spring Hill slaughter plant in Canada has started killing hogs again, as of the week ending October 25th the increase in slaughter hog imports has not declined. For the week ending October 25th, the increase in slaughter hog imports from Canada above last years level amounted to nearly 1.7 percent of our slaughter.

Sow slaughter from domestic producers continues to run sharply below a year earlier. For the week ending October 25th, sow slaughter from domestic producers was down almost 23 percent from last year. Since the 1st of September, sow slaughter from domestic producers, through the weeks ending October 25th, has been down 75,938 head. This amounts to 1.3 percent of the September 1 breeding hog inventory. During these 8 weeks, gilt slaughter, based on our sample, has run at the level that usually results in little or no change in the size of the breeding herd.

We certainly hope this data is overstating what producers are doing to the breeding herd. We need to continue to reduce the breeding herd rather than increase.

We believe the probabilities are high that the overrun in hog slaughter is probably due to productivity growth. If so, and this increased productivity continues through 2004, slaughter during 2004 will be larger than in 2003!

Cash hog prices were from $0.50 to $3.00 higher compared to last Friday this Friday morning at the public markets.

Average carcass prices were also higher this Friday morning than 7 days earlier by $1.25 to 3.14 per cwt.

The top prices at the public markets this Friday were: Peoria $34.00, St. Paul $35.00, Sioux Falls $35.50 and interior Missouri $31.75.

The weighted average price for 185 pound carcass with 0.9-1.1 inches of back fat, 6 square inch loins 2 inches deep by area were: western Cornbelt $48.90, eastern Cornbelt $45.88, Iowa-Minnesota $49.68 and Nation $47.55.

Pork product prices also were steady to a little higher at noon this Friday than a week earlier. These prices were: Pork loins with 1/4 inch trim $90.00 per cwt, boston butts with 1/4 inch trim $58.28 per cwt, 17-20 pound hams $60.00 per cwt and 12-14 pound bellies $80.00 per cwt.