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Weekly Review: Sow Prices Under Pressure

by 5m Editor
20 June 2009, at 5:38pm

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

Sow prices have come under pressure in the last two weeks with light-weight sow prices a bit harder than heavy-weight sows. Hopefully, this means we have gotten more serious about reducing the size of the sow herd.

Pork exports in April were over 21 per cent below a year earlier. For January through April, pork exports were down nearly 11 per cent. For these four months, pork exports to Japan were up 8.5 per cent, to Mexico up 54 per cent, to Canada down 6.8 per cent, to South Korea down 3.9 per cent, to Russia down 47.2 per cent, to China and Hong Kong down 64.2 per cent, to Australia up 40 per cent, to Taiwan up 69.8 per cent and to other countries down 8.8 per cent compared to last year.

Pork imports in April were down 3.4 per cent from the same month in 2008. For January-April, pork imports were down 5.0 per cent from a year earlier. In January-April, our pork imports from Canada were up 2.4 per cent, from Denmark down 8.5 per cent, from Mexico down 71.5 per cent, from Poland down 18 per cent, from Italy down 10.1 per cent and from other countries down 27.7 per cent from 2008.
Net pork exports as a percent of production for January-April were at 16.65 per cent in 2008 and declined to 14.29 percent in 2009 or a reduction of 14.2 per cent from 2008 to 2009.

For January-April, the value of pork exports per hog slaughtered in the US was $32.51; add pork variety meats in and the amount per hog was $39.44. Even though it was down from last year, exports are still very important to the US hog industry.

Hog slaughter in the last month has been almost exactly the same as last year. Weights have added at least 2 per cent to the pork supply. Exports during April were enough smaller to add 3.9 per cent to the domestic supply; and in the last month the reduced pork exports have probably added between five and six per cent to the domestic supply. When one considers we have had seven to eight percent more pork recently this year domestically than last year, it indicates our problem as to prices has been supply and not demand.

The H1N1 flu probably impacted demand negatively at the consumer level in late April and early May but has come back in recent weeks.

Demand for live hogs is down because of the smaller exports. Retail pork prices in 2009 were up 1.4 percent from April and up 1.8 per cent from May of 2008. Retail pork prices for January-May were up 3.5 per cent this year from last year.

The processor-retailer got most of the increase in retail price. For January-May the processor-retailer margin was up 9.1 per cent. The producers' live hog price was down 4.3 per cent, and the packers' margin was down 7.3 per cent.

Pork cutout this week Thursday afternoon at $55.58 per cwt of carcass was down $1.05 per cwt from a week earlier.

Live hog prices Friday morning were $0.75 - $4.00 per cwt higher compared to a week earlier. The weighted average negotiated carcass price Friday morning was $0.54 - $1.32 per cwt higher compared to last Friday.

The live prices for select markets Friday morning were: Peoria $33 per cwt, Zumbrota, Minnesota, $37 per cwt and interior Missouri $39.50 per cwt.

The weighted average negotiated carcass prices by area Friday morning were: western Cornbelt $56.43 per cwt, eastern Cornbelt $52.68 per cwt, Iowa-Minnesota $56.47 per cwt and nation $54.25 per cwt.

Feeder pig prices this week at United Tel-O-Auction were mixed with some pig prices sharply lower than two weeks ago. All of the pigs weighed 50-60 pounds and sold from $47-93 per cwt.

Nationwide feeder pig prices were $5-7 per head lower last week. Ten-pound-basis pigs sold for $25.23 per head and 40-pound-basis pigs sold for $27.15 per head.

Slaughter this week under Federal Inspection was estimated at 2,062 thousand head, down one per cent from last year.