Pork demand at the consumer level for January-November was down 5.6 per cent but has been weak all year. The demand for hogs at the live level for these 11 months is up. The gain for January-November was 6.2 per cent. This strong live demand is due mostly to the big increase in pork exports.

With the problems that developed with Mexico just before Christmas about pork exports which Mexico says will be resolved fairly quickly, the pork cutout value per cwt of carcass was pushed the lowest in over five years.

This disruption is having a negative impact on live hog prices. Hopefully it will be resolved quickly and appears to be resolved by Friday.

The 1 December Hogs and pigs report came in a little more bullish than the average of the trade estimates. The USDA total hogs and pigs inventory was down 2.2 percent but the trade estimate was down only 1 per cent from 2007. The trade estimate was for the breeding herd to be down 3.3 per cent but the USDA number was down only 2.4 per cent. The USDA estimate for the market herd was down 2.1 per cent and the trade estimate was down only 0.7 per cent. The report was quite consistent with our gilt and sow slaughter data.

The futures market on Wednesday opened with very small changes from Tuesday's close but February contract was up more than a dollar on Wednesday's close and was up over $2.00 per cwt on Friday.

The market inventories and farrowing intentions indicate slaughter in 2009 is likely to be just short of 113 million head, down about 3.5 per cent from 2008. Included in these numbers is an estimate of reduced live hog imports from Canada. However, when one includes smaller exports and larger imports of pork by the US the probabilities are for pork suppliers in 2009 for domestic consumption will not be down more then 1 or 2 per cent.

With the potential for weaker consumer demand for pork in 2009 then 2008, our estimate of price for the year is the same to 1 or 2 dollars per cwt higher in 2009 then 2008. This data indicates 2009 will be another challenging year for hog producers.

Pork product prices Wednesday afternoon at $53.32 per cwt of carcass was down $0.97 per cwt from a week earlier and the lowest in over five years. Loin prices at $79.12 per cwt were up $1.42 per cwt, Boston butts at $57.28 were down 3.57 per cwt, hams at $35.26 were down $1.91 per cwt, and bellies at $69.98 were up $0.52 per cwt from a week earlier.

Feeder pig prices at United Tel-O-Auction this week were some higher then two weeks earlier. United had only pigs weighing 50-60 pounds and they sold from $110-112 per cwt.

We did not have live hog prices last week to compare this weeks to weighted average negotiated carcass prices this Friday morning were $0.14 - $0.51 higher compared to seven days earlier.

The price of weighted average negotiated carcass by area Friday morning were: western Cornbelt $49.60, eastern Cornbelt $50.97 per cwt, Iowa-Minnesota $49.45 and nation $49.98 per cwt.

The live weight of barrows and gilts in Iowa-Minnesota last week at 266.6 pounds were 0.5 pound below a week earlier and a whopping 4.5 pounds below a year earlier. The big decline from a year earlier may be weather related. For the week ending 22 December weights were only 1.4 pounds below 12 months earlier.

Slaughter this week under Federal Inspection was estimated at 1,918 thousand head, down 3.9 per cent from a year earlier.