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| Hog future prices look optimistic for producers |
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| Barrow and gilt weights in Iowa-Minnesota for the week ending on April 8 at 268.8 pounds were down 0.7 pound from a week earlier and down 1.4 pounds from a year earlier.
The seasonal pattern for barrow and gilt weights is to reach a high in early winter and a low in August most years. Therefore, weights are likely to trend lower for the next four months.
Gilt and sow slaughter continues to run at a level that indicates the probabilities are low that producers are reducing the breeding herd at a very slow rate if at all.
Based on a survey in process now at the University of Missouri and Iowa State University, the producers that market 50,000 or more hogs annually have plans to increase marketings in 2007 over 2006 and in 2009 over 2006. This data was collected in January and February. Let’s hope the higher grain prices have made some of these producers re-evaluate their plans, but I doubt that it has.
Substantial speculation this week that the cold and wet conditions in the Corn Belt may contribute to some corn producers shifting some of the 90.450 million acres planned to be planted to corn back to soybeans.
Futures prices continue to be quite optimistic about the price of hogs for the remainder of the year. In mid-week it was possible to lock in a price between $50 and $51 per cwt. live using the futures market for the remainder of the year with average basis.
Even if hog slaughter drops back to the levels indicated by the March Hogs and Pigs report, we probably will need some demand growth to get prices above $50 per cwt. live for the remainder of the year.
For April though December of 2006, 51-52 percent lean hogs U.S. basis averaged $48.50 per cwt.
Live top hog prices last Friday morning were 25 cents to $2 per cwt. higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were 77 cemts to $3.68 per cwt. higher compared to seven days earlier.
The top live prices Friday morning for select markets were: Peoria $42.00 per cwt., St. Paul $44 per cwt. and interior Missouri $44.25 per cwt.
The weighted average negotiated carcass prices by geographic area were: western Corn Belt $64.91 per cwt., eastern Corn Belt $62.84 per cwt., Iowa-Minnesota $65.23 per cwt. and nation $64.05 per cwt.
Pork product prices per cwt. of carcass Thursday afternoon at $66.43 per cwt. were up $1.19 per cwt. from a week earlier.
Pork loins were up $1.45 per cwt. at $80.55 per cwt., Boston butts at $73.60 per cwt. were up 40 cents per cwt., hams were up $2.66 per cwt. at $51.11 per cwt. and bellies at $90.50 per cwt. were up $0.15 per cwt. from seven days earlier.
Slaughter this week under Federal Inspection at 1.971 million head was up 1.8 percent even with the reduced slaughter on Monday due to the Easter holiday.
Feeder pig prices last week at United Tel-o-Auction were steady to some higher than two weeks earlier. The prices for 50-60 pound pigs were $96-$120.50 per cwt.
This farm news was published in the April 18, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 4/18/2007 |
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