World pork production is expanding. USDA’s Foreign Agriculture Service is predicting that this year’s world pork production will be up 2.7 percent from 2011. Several of our key foreign markets are showing growth in their hog numbers. China, the third largest buyer of U.S. pork last year, is expected to increase its pork production by 4 percent this year. Pork production in South Korea, last year’s number five foreign customer, is expected to be up 17 percent. Increased foreign production could hurt U.S. pork exports. Last year we exported a record 22.8 percent of our pork production. Given the weak U.S. economy, strong exports are crucial to hog prices. Calculated domestic pork demand during February was up 0.6 percent compared to a year earlier. Export demand for U.S. pork was up 1.6 percent in February. Packer demand for hogs was 1.6 percent higher this February than last.

Retail pork prices in March averaged $3.49 per pound, down half of a penny from February, but up 13.3 cents from March 2011.

The average live price for 51-52 percent lean hogs in March was $61.86 per cwt., down $2.08 from February and 77 cents lower than in March 2011.

Hog prices ended this week mostly steady with the previous Friday. The national average negotiated carcass price for direct delivered hogs on the morning report today was $79.39 per cwt., down 28 cents from last Friday. The Eastern Corn Belt averaged $79.23 per cwt. this morning. 

The Western Corn Belt averaged $80.70 per cwt. Iowa-Minnesota had an average price of $80.66 on the morning report. Peoria topped at $55 and Zumbrota, Minn., a top of $54 per cwt today. The top for interior Missouri live hogs Friday was $58 per cwt., down $1.25 from the previous Friday.

The pork cutout value was lower this week. USDA’s Thursday afternoon calculated cutout value was $77.46 per cwt., down $1.36 from the previous Thursday. Hams were higher this week. Bellies, butts and loins were lower. 

Packer margins remain tight. The national average hog carcass price this morning is 2.5 percent above the pork cutout value.

Hog slaughter totaled 2.084 million head this week, up 2 percent from the week before and up 1.2 percent compared to the same week last year. Barrow and gilt carcass weights for the week ending April 7 averaged 206 pounds, unchanged from the week before and up one pound from a year ago. The average barrow and gilt live weight in Iowa-Minnesota last week was 276.4 pounds, up 0.3 pounds from a week earlier, up 4.2 pounds from a year ago, and above a year earlier for the 21st consecutive week.

Friday’s close for the May lean hog futures contract was $87.50 per cwt., down $2.62 from the previous Friday. The June lean hog futures contract settled at $87.40 per cwt., down $2.82 for the week. July hogs ended the week at $87.95 and August settled at $88.50 per cwt.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Ron Plain may write to him in care of this publication.