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Hog Outlook: Pork Products Strengthened This Week

by 5m Editor
21 April 2007, at 7:58am

US Weekly Hog Outlook, 21st April 2007 - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Pork exports for February 2007 were down 1.5% from a year earlier. This is the first month to be below 12 months earlier since July of 2006 and only the second month to be below a year earlier since August of 2003. However, for January and February pork exports were up 9% from last year. USDA estimate for 2007 pork exports is for an increase of 11% from 2006. So, hopefully, the results in February are not a trend for the remainder of the year.

Our January - February pork exports were up 26.8% to Japan from last year and up 2.5% to Canada, down 16.8% to Mexico, up 13.3% to Russia, up 21.2% to South Korea, up 37% to mainland China and Hong-Kong, down 61.8% to Taiwan, down 37.1% to Caribbean and up 23.4% to other compared to the same months of 2006.

Pork imports for January - February 2007 were down 9.0% from last year. For the first two months of 2007 net pork exports as a percent of production at 10.7% was up 1.44 percentage points from a year earlier. These larger net pork exports are the major reason for the growth in live hog demand in recent months.

Live hog imports from Canada for January and February were up 11.3% from 12 months earlier. Feeder pig imports were up 10.2% and slaughter hog imports were up 13.7% from 2006.

Retail pork prices in March 2007 were up 1% from February 2007 and up 2.2% from March of 2006. For January - March retail pork prices were up 1.2% from a year earlier.

Hog producers received all of the increase in retail prices, plus some because marketing margins for the three months were down 1% from 12 months earlier. As a result of the higher retail prices and smaller marketing margins live hog prices for January - March were up 8% from the same months of 2006.

Barrow and gilt slaughter weights for the week ending April 14 were down 0.4 pounds from a week earlier, but up 0.3 pounds from a year earlier. This is only the second week for the weights of barrows and gilts in Iowa-Minnesota to be above 12 months earlier since August of 2006. This data indicates marketings as to currentness are about the same as a year earlier in the Midwest.

Cash live hog prices showed a good rally this week with prices from $2.50-4.00 per cwt higher Friday morning than a week earlier. Weighted average carcass negotiated prices Friday morning were $1.42 per cwt lower to $2.26 per cwt higher compared to 7 days earlier.

The top live prices for select markets Friday morning were $46.00 per cwt at Peoria, St. Paul $48.00 per cwt and interior Missouri $46.75 per cwt.

The weighted average negotiated prices for carcasses by geographic area Friday morning were: western Cornbelt $66.08 per cwt, eastern Cornbelt $66.42 per cwt, Iowa-Minnesota $66.81 per cwt and nation $66.31 per cwt.

Pork product prices gained strength this week with the cut-out Thursday afternoon at $70.53 per cwt up $4.10 per cwt from a week earlier, loins at $88.71 per cwt, up $8.16 per cwt, Boston butts down $0.29 per cwt at $73.31 per cwt, hams at $55.17 per cwt, up $4.06 per cwt and bellies up $4.10 per cwt at $94.60 per cwt.

Slaughter this week is at 1,984 thousand head, up 2.9% from a year earlier under Federal Inspection.

5m Editor