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Weekly Review: High Pork Demand at Consumer Level

by 5m Editor
2 May 2009, at 8:26am

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Some people have a personality that what bad can happen will likely happen. That is what has happened to the hog industry this week. The flu outbreak in Mexico and a few states is being called swine flu for some reason that is not readily known. No hogs have had this strain of flu to date. However, the bad news did happen and at least in the short run it has been negative to the futures market which had some contracts limit down on Monday and the Cash Market down for the week. Some countries are using this flu as an excuse to stop imports from at least the states where the flu has been reported. The bottom line is that no hogs have had the strain of flu and pork properly cooked is completely safe but emotions are hard to control.

It is too early to tell if the flu will negatively impact pork or live hog demand. Lets hope not but only time will tell.

Canada released their 1 April Hogs and Pigs inventories this week and the news is good. The breeding herd was down 6.2 per cent and the total herd was down 8.6 per cent. Market hogs under 20 kilograms were down 12.1 per cent and market hogs weighing over 20 kilograms were down 7 per cent. It is not clear why the light weight market hogs were down so much more than the breeding herd. Sow farrowing January-March were only down 7 per cent and the pig crop is reported to be down only seven percent. Feeder pig exports to the US are down sharply. Total hog exports to the US in January and February were down nearly 43 per cent. The differences are probably just sample and data collection errors.

Demand for pork at the consumer level for January-March this year continues to hold up well with a 3.3 per cent growth in our demand index. Beef demand at the consumer level was also up nearly one percent.

The bad news is that the live hog demand for this three month period was down 2.3 per cent from a year earlier. Live fed cattle demand is being hit hard with a 6.7 per cent loss in the last year.

The average number of dollars spent for pork in both deflated and current dollars per person for January-March was up nearly $1 in deflated dollars and up nearly $2 per person in current dollars.

Pork product prices continue to be stuck in the upper $50 with the cutout Thursday afternoon at $56.63 per cwt down $3.15 per cwt from a week earlier. Loin prices at $23.14 per cwt were down $1.35 per cwt, Boston butts at $62.98 per cwt were down $7.16 per cwt, hams at $36.47 per cwt were down $6.37 per cwt and bellies at $72.87 per cwt were down $3.02 per cwt from seven days earlier.

Live hog prices this Friday morning were $2-6 per cwt lower compared to last week. The weighted average negotiated carcass prices were $4.23-9.15 lower compared to seven days earlier.

The top live prices for select markets this Friday morning were: Peoria $35.50 per cwt, Zumbrota, Minnesota, $35.00 per cwt and interior Missouri $42.50 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $53.45 per cwt, eastern Cornbelt $55.87 per cwt, Iowa-Minnesota $53.43 per cwt and nation $54.60 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,047 thousand head, down 4.6 per cent from a year earlier.