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CME: Hog Slaughter Higher Than a Year Ago

by 5m Editor
1 December 2009, at 6:25am

US - Steve Meyer and Len Steiner write, "Since we did not get a chance to discuss it on Friday, below are some of the highlights."

Slaughter and production numbers were lower due to the shortened holiday week. Cattle slaughter for the week was 530,000 head, some 7 per cent lower than a year ago. Dressed carcass weights are currently well below year ago levels and this has further reduced the supply of beef available in the marketplace, with total beef production down 8.6 per cent for the week. The reduction in slaughter numbers was mostly a result of fewer fed cattle coming to market but also a moderate reduction in cow slaughter. Steer and heifer slaughter for the week was estimated at 422,000 head, 8.3 per cent lower than a year ago. Cow and bull slaughter for the week were estimated at 108,000 head, 3.6 per cent lower than a year ago.

Hog slaughter, on the other hand, was slightly higher than a year ago. Rising cutout values and good holiday demand for pork items, especially hams, caused packers to raise bids in order to secure hogs this week. The IA/MN hog carcass price for the week was quoted at $55.99 /cwt, 9.5 per cent higher than a week ago and now 5.6 per cent higher than year ago levels. Pork cutout values continued to advance this week and were up 4.6 per cent from a week ago and they currently are 4.4 per cent higher than year ago levels. Ham prices should be firm through the first half of December and it remains to be seen how well the pork cutout is able to hold up following the normal seasonal decline in ham values.

USDA issued its latest weekly update on US corn and soybean harvest on Monday and the results were generally within the range of expectations. Corn harvest remains well below year ago levels but, as the chart below illustrates, US farmers have made up significant ground in recent weeks following an especially slow start to the season. As of November 29, 79 per cent of the US corn crop had been harvested compared to 94 per cent a year ago and 97 per cent average for the past five years.

Harvest is well behind schedule in the Dakotas, with North Dakota corn harvest at just 40 per cent, compared to 89 per cent five year average. Harvest in Illinois was at 72 per cent, compared to 98 per cent a year ago and 99 per cent average for 2004-08. Soybean harvest, on the other hand, is in much better shape. USDA reports that 96 per cent of the soybean crop had been harvested through November 29, compared to 98 per cent a year ago and 98 per cent five year average. In a normal year, this would be the final USDA crop progress report. However, with 21 per cent of the corn crop yet to be harvested, USDA has extended the reporting window and the final report now is scheduled for 7 December. The last time we could find when the progress report was extended to such a late date was in 1992. That year was one of the slowest harvests on record, with 75 per cent completed through the last weekend in November. Corn yield in 1992 was 108.6 bu./acre, down 8.4 per cent from the prior year. The latest USDA estimate pegs 2009 corn harvest to yield on average 162.9 bu./acre, a 5.8 per cent increase from year ago levels.

Page 2 of the link below contains the summary of price and production numbers for the previous week.

Further Reading

- You can view the full report by clicking here.