Statistics Canada says the Canadian hog herd on July 1 was 1.5 percent larger than a year ago and their breeding herd was up 1 percent. Despite a larger sow herd, Canadian producers say they will farrow 1.4 percent fewer sows in the third quarter of 2012 and 1.3 percent fewer in the fourth quarter compared to a year earlier. Pigs born per litter during the second quarter of 2012 were up 1.5 percent from a year ago. It seems reasonable to expect the Canadian pig crop in the second half of 2012 to be close to year-ago levels.

Domestic pork demand was down 6 percent in June compared to 12 months earlier. Fortunately, export demand was up 5 percent leaving hog demand down only 1.7 percent compared to June 2011. Domestic meat demand was down 1 percent during the last 12 months.

The latest Cold Storage report says the amount of pork in cold storage at the end of July was down 8 percent from June, but up 20 percent from a year ago.

Corn and soybean meal prices continue to set records. Based on current futures prices, it looks like breakeven prices for hogs will average close to $90 per cwt., of carcass both this year and in 2014. For 2013, a carcass price of $102 per cwt., will likely be needed to cover production costs.

The Thursday afternoon calculated pork cutout value was $87.05 per cwt., down $3.78 from the previous Thursday and $15.06 lower than a year ago. Loins, butts, hams and bellies were all lower this week. As often occurs this time of year, bellies dropped $11.37 per cwt., in value as we approach the end of BLT season.

Hog prices were down for the third week in a row. The national average negotiated carcass price for direct delivered hogs on the morning report today was $79.86 per cwt., down $5.05 from last Friday. The Eastern Corn Belt was down $4.59 to $80.09 per cwt., and the Western Corn Belt fell $6.21 to $79.71. Iowa-Minnesota dropped $5.47 to $80.52 per cwt. Peoria, Ill., had a top live price this morning of $52 and Zumbrota, Minn., had a live top today of $56 per cwt. The top for interior Missouri live hogs Friday was $58.50 per cwt., down $6 from the previous Friday. Today’s average hog carcass price is 91.7 percent of the cutout value.

Hog slaughter this week totaled 2.265 million head, up 4.6 percent from the week before and up 6.7 percent compared to the same week last year. Typically, daily hog slaughter trends higher from mid August until early December.

The average barrow and gilt live weight in Iowa-Minnesota last week was 267.6 pounds, 1.7 pounds above a week earlier and up 5.2 pounds from a year ago. Weights are up for the third consecutive week which likely means the low for the year is behind us. The stretch of above year-earlier weights dating back to November of 2011 continues.

Hog futures were much lower this week. Friday’s close for the October lean hog futures contract was $72.37 per cwt., down $3.83 from the previous Friday. December hogs settled at $70.57 per cwt., down $3.03 for the week. February 2013 hogs ended the week at $78.52 per cwt., down $2.68 from the week before.

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.