The August CPI was only 1.1 per cent higher than a year earlier.

Retail pork prices during August were record high for the fourth month in a row. The average price of pork in grocery stores last month was $3.232/pound, up 4.7 cents from July and up 29.8 cents compared to August 2009. The wholesale value of pork was also record high during August.

Pork marketing margins are tighter than a year-ago. Packer margins were 0.8 cents per pound lower than in August 2009 and distribution-retailing margins were 13.6 cents per pound lower. August hog prices were the highest of any month since August 2008. Hog prices were $24.93/cwt higher on a live weight basis this August than last. Year-ago hog and pork prices were low because of the swine flu scare.

USDA’s Thursday afternoon calculated pork cutout value was $91.81/cwt, up $1.56 cents from the previous Thursday. Loins, bellies and hams were higher, but butts were lower. Bellies averaged $1.5725 per pound, the highest ever.

The national weighted average carcass price for negotiated hogs Friday morning was $76.43/cwt, $3.03 lower than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $75.81, western corn belt $79.02, and Iowa-Minnesota $78.97/cwt. The top live hog prices Friday were $55/cwt at Zumbrota and $54 at Peoria. The interior Missouri live top Friday was $55.75/cwt, 75 cents higher than the previous Friday.

This week’s hog slaughter totaled 2.164 million head, up 13.9 per cent from the week before (which was light because of Labor Day) but down 6.4 per cent compared to slaughter during the same week last year.

The average carcass weight of barrows and gilts slaughtered the week ending September 4 was 197 pounds, up 1 pound from the week before and even with a year ago. Iowa-Minnesota live weights last week averaged 268.1 pounds, down 0.8 pounds compared to a year earlier. This was the sixth consecutive week that Iowa-Minnesota weights have averaged below year-ago.

The October lean hog futures contract ended the week at $77.70/cwt, up 45 cents from the previous Friday. The December contract settled at $75.95 up $1.25 for the week. February closed the week $1.53 higher at $79.60/cwt.

The December corn contracted ended the week at $5.135, up 35 cents from the previous Friday. October soybean meal futures gained $13.50 this week to settle at $304.70/ton.

Next Friday USDA will release their quarterly estimate of the nation’s hog inventory. I expect them to report that the breeding herd is 0.9 per cent smaller than a year ago and the market hog inventory is down 3.0 per cent compared to 1 September 2009. I am forecasting fall farrowings to be down 0.9 per cent and winter farrowings to be off 0.5 per cent compared to a year ago.