Pork exports in September were up 7.4 percent from 12 months earlier. For January-September pork exports were up 11.5 percent from a year earlier.

Pork imports for January-September were 1.5 percent below the same period in 2005. Net pork exports for January through September were at 9.52 percent of production, up from 8.08 percent a year earlier. This growth in net pork exports along with population growth are the major reasons for the stronger live hog demand than consumer demand for pork.

Our growth in pork exports by country were: Canada up 7.6 percent, Mexico up 18.6 percent, Russia up 131.2 percent, South Korea up 47.8 percent, China and Hong Kong up 10.7 percent, Taiwan up 3.9 percent, Caribbean up 89.3 percent and other up 7.9 percent.

Live hog imports from Canada were down 5.5 percent in September from 12 months earlier, feeder pig imports were up 1.4 percent, but slaughter imports were down 16.6 percent from a year earlier. Live hog imports for the first nine months of 2006 were up 7 percent, feeder pig imports were up 12.2 percent and slaughter hog imports were down 3.3 percent for January-September compared to a year earlier.

Slaughter since September 1 is up 2.55 percent from the same period in 2005. Based on the September Hogs and Pigs report we are expecting slaughter to be up 2 percent. The 2.55 percent is from U.S. raised hogs. As long as slaughter comes in within about half of 1 percent of expectations, we have no complaints about the Hogs and Pigs report.

The average weights of barrows and gilts in Iowa-Minnesota were up last week by 0.5 pound from a week earlier, but were 0.9 pound below 12 months earlier. These lighter weights than a year earlier are an indication that the higher feed prices are resulting in pulling weights down some.

A study by the Center for Agriculture and Rural Development (CARD) at Iowa State University indicates with expected oil prices, tax credits and distiller dried grains when combined with plant construction and operating costs creates a value for corn at $4.05 per bushel. This indicates that as long as corn prices are below $4.05 per bushel, new ethanol plants will be built and they will force the prices up to $4.05 per bushel.

What does this mean for the hog industry? This priced corn would increase the cost of producing hogs just over 30 percent. We believe U.S. production of hogs would need to be reduced 10-15 percent to drive up hog prices enough to cover these costs.

The big question is who will cut hog production? With the current structure of the hog industry with high fixed investments there is likely to be substantial pain before the reduction occurs.

With the large runs of market hogs being influenced some by feed costs, hog prices came under strong downward price pressure this week.

Top live prices this Friday morning were $5 to $5.50 per cwt. seven days earlier. The weighted average negotiated carcass price Friday morning was $3.94 to $5.32 per cwt. below a week earlier.

The top live prices Friday morning for select markets were: Peoria $37 per cwt., St. Paul $40 per cwt., Sioux Falls $40.50 per cwt. and interior Missouri was unavailable.

The weighted average carcass prices by geographic area Friday morning were: western Corn Belt $56.15 per cwt., eastern Corn Belt $55.43 per cwt., Iowa-Minnesota $56.33 per cwt. and nation $55.80 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,121,000 head, down 0.9 percent from a year earlier.

This farm news was published in the Nov. 22, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.