Most of those hogs have gone to slaughter by now and it looks like 2 per cent more would have been a better estimate of the heavy weight barrow and gilt inventory rather than 0.4 per cent fewer.

Sow slaughter this fall has been high. Adjusted for Canadian imports it looks like fall sow slaughter was up 3.6 per cent. This is consistent with USDA reporting the breeding herd declined by 3,000 head from September to December.

Hog prices were higher this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $80.44/cwt, up $2.21 from last Friday. For the second Friday in a row, there were no morning price quotes for the western corn belt or for Iowa-Minnesota. The eastern corn belt averaged $80.02/cwt this morning. Friday's top live hog price at Peoria was $56/cwt. Zumbrota, MN had a top of $57/cwt. The top for interior Missouri live hogs was $60/cwt, up $2 from the previous Friday.

USDA's Thursday afternoon calculated pork cutout value was $84.33/cwt, down $1.70 from the previous Thursday. Loins, hams and butts were lower; bellies a bit higher. This week's pork cutout is the lowest since 13 January of last year.

Does the weak cutout value reflect the higher-than-expected slaughter in recent weeks, or does it reflect a weakening in meat demand. The unemployment rate dipped to 8.5 per cent in December. Hopefully, 2012 will be positive for domestic meat demand.

Hog prices this morning are 95.4 per cent of the pork cutout value, a very high level for this time of year. Either the cutout rises next week or the pressure will be great for lower hog prices.

Hog slaughter totaled 2.063 million head this week, up 4.9 per cent from the week before, but down 5.1 per cent compared to the same week last year. Barrow and gilt carcass weights for the week ending December 24 averaged 204 pounds, down 1 pound from the week before and unchanged from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged a record 277.9 pounds, up 2.2 pounds from the week before and up 3.2 pounds compared to last year.

Today's close for the February lean hog futures contract, $83.90/cwt, was down 40 cents from the previous Friday. The April lean hog futures contract settled at $87.75/cwt, up 5 cents for the week. May hogs settled at $94.50/cwt. June hogs ended the week at $94.90/cwt.

The March corn futures contract price lost 3 cents this week to settle at $6.435/bushel.