Iowa State University calculations said the average market hog sold in November incurred a loss of $38.78. They estimate the cost of production for hogs slaughtered in November at $73.84/cwt, which was a record high for the fourth consecutive month. For all of 2012, it looks like the typical hog was sold for roughly $12 per head less than the cost of production.

USDA's December Hogs and Pigs Report predicted winter farrowings would be even with last year and spring farrowings would be down 1.9%. Given that the number of pigs per litter has been increasing at a rate of 1% to 1.5% recently it appears reasonable to expect 2013 hog slaughter to be close to the 2012 total of 113.1 million head.

Despite the bearish hog inventory report, cash and futures prices are ending the week close to the pre-release level.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $83.04/cwt, up $2.64 from last Friday. The eastern corn belt was 69 cents higher than last Friday at $80.64/cwt. Neither the western corn belt nor Iowa-Minnesota had a morning price quote for negotiated sales this morning. Peoria had a live top of $53.50/cwt on Friday. Zumbrota had a top today of $56/cwt. The top for interior Missouri live hogs Friday was $59.25/cwt, up $3.50 from the previous Friday.

The Thursday afternoon calculated pork cutout value was $83.10/cwt, up $1.54 from the previous Thursday. Loins, hams, and belly prices were higher, but butts were lower. The pork cutout value is $1.23/cwt lower than a year ago. The national average hog carcass price this morning is 99.9% of the cutout value, so look for lower packer bids next week.

Because of the New Year's holiday, hog slaughter was light this week. Hog slaughter this week totaled 1.975 million head, up 12.5% from the week before, but down 4.3% compared to the same week last year.

The average barrow and gilt live weight in Iowa-Minnesota last week was 275.8 pounds, up 2.2 pounds from a week earlier, but down 2.1 pounds from a year ago. This was the 14th consecutive week with weights under the year-ago level.

Hog futures started the week sharply lower but recovered to end nearly unchanged. Friday's close for the February lean hog futures contract was $86.22/cwt, down 15 cents from the previous Friday. April hog futures ended the week 27 cents lower at $89.85/cwt. May hogs settled at $96.97/cwt; June hogs at $98.75/cwt.