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Weekly Review: Exports to Mexico Recovered in June

by 5m Editor
22 August 2009, at 8:41am

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

Pork exports in June were down 35.7 per cent from a year earlier; 70 per cent of the decline was from China and Hong Kong. Pork imports for June were down 3.7 per cent from 12 months earlier.

For January-June, pork exports in carcass weight equivalent were down 20.4 per cent. US January-June exports to Japan were up 0.3 per cent, to Mexico up 38.1 per cent, to Canada down 5.4 per cent, to South Korea down 12.6 per cent, to Russia down 37.6 per cent, to Australia up 20.2 per cent, to Taiwan up 10.0 per cent, to China and Hong Kong down 72.9 per cent and to other countries down 23.3 per cent.

Our exports in June to Mexico rebounded 35 per cent from May and were up 26.8 per cent from June a year earlier. Most or all of the decline in pork exports to Mexico because of the H1N1 flu was recovered in June.

Net pork exports as a per cent of pork production for January-June at 14 per cent were down from 17.8 per cent for the same six months of 2008.

Total live hog imports from Canada for January-June were down 33.4 per cent from 12 months earlier.

Retail pork prices in July were up 0.1 per cent from June but down 0.2 per cent from July 2008. However, for January-June retail pork prices were up 2.5 per cent from 12 months earlier.

The pork processor and retailer were the only segments of the pork industry to gain from the higher retail prices. The margin for the processor and retailer was up 15.4 per cent from a year earlier. The packers' margin was down 7.8 per cent and the producers' price was down 1.8 per cent for January-July compared to 12 months earlier.

Pork product prices were pushed lower again this week with the cutout at $51.34 per cwt Thursday afternoon, down $0.97 per cwt from a week earlier. Loins at $66.13 per cwt were down $2.37 per cwt, Boston butts at $55.64 per cwt were down $3.65 per cwt, hams at $40.42 per cwt were up $0.08 per cwt, and bellies at $56.18 per cwt were up $0.19 per cwt from seven days earlier.

The odds are quite high for 51-52 per cent lean hogs live to be in the upper $20's for the fourth quarter. Even though demand at the consumer level is holding well, it is not strong enough to offset the weak export demand and wide market margins at the processor and retail level.

Feeder pigs nationally last week were $4-10 per head lower than a week earlier. The average price for 50-54 per cent lean ten-pound-basis pigs was $21.82 per head. 40-pound-basis pigs 50-54 per cent lean sold for an average of $11.70 per head.

Ten-pound-basis pigs negotiated or spot priced were $7.93 per head. 40-pound-basis pigs spot priced were $10.42 per head. The formula price for ten-pound-basis pigs was $32.00 per head, and the formula price for 40-pound-basis pigs was $37.68 per head.

Live hog prices Friday morning were down $1.00 to up $3.00 per cwt compared to a week earlier. Negotiated weighted average carcass prices were $0.42-1.42 per cwt lower compared to seven days earlier.

The top live prices Friday morning were: Peoria $25.00 per cwt, Zumbrota, Minnesota, $28.00 per cwt and interior Missouri $33.50 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $45.82 per cwt, eastern Cornbelt $44.31 per cwt, Iowa-Minnesota $45.82 per cwt and nation $44.64 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,228 thousand head, down 0.4 per cent from 12 months earlier.