Last week ended with hog prices mixed compared to seven days earlier. The top price on Friday at Peoria, Ill. was $45 per cwt., off $2.50 from the previous Friday. St Paul, Minn. was steady at $49 and Sioux Falls, Iowa had a top price of $51.50 per cwt. The interior Missouri top Friday was $49.75, down $0.75 for the week. The national weighted average carcass price Friday morning for negotiated hogs was $69.33 per cwt., $0.44 higher than the previous Friday.

Regional average prices on Friday morning were: eastern Corn Belt $70.83, western Corn Belt $68.82 and Iowa-Minnesota $68.85 per cwt. Hog prices are roughly $1-3 lower than early June 2006.

Hog prices got no help from the cutout value which also dropped this week. The Thursday afternoon USDA calculated cutout value was $73.23 per cwt., down $1.01 from the previous Thursday.
Pork loins were sharply lower, Boston butts and pork bellies lost a bit and hams were higher. The weakness in product values has packers cutting back on hours and lowering hog bids.

This week’s hog slaughter was 1.924 million head, up 1.4 percent compared to the same week in 2006. Year-to-date slaughter is up 1.9 percent. The average carcass weight of barrows and gilts slaughtered the week ending May 26 was 198 pounds, up one pound from the same week in 2006. This is the first week with barrow and gilt carcass weights above the year-earlier level since the last week of September. With corn prices $1.50 per bushel higher than year-ago, slaughter weights should remain relatively light, especially if we have a hot summer.

Since March 1, hog slaughter has averaged 3.5 percent higher than the same period last year. This is well above the 1.6 percent increase indicated by USDA’s March inventory report. Imports of slaughter hogs from Canada were 8.6 percent higher than last spring. Thus, slaughter of U.S. raised hogs since March 1 is only up 3.3 percent compared to last year. Look for some upward revisions in the next hog inventory report. Weekly feeder pig imports during March-May were up 10.2 percent compared to the same period last year. As you might expect given the large number of hog imports, 2007 Canadian hog slaughter is down 2.5 percent compared to last year.

Sow slaughter through May was 2.96 percent higher than for the same weeks in 2006 and 4.63 percent higher than in January-May 2005. Part of this increase is due to a larger sow herd this year. Part is likely due to $3 plus corn. We expect the breeding herd inventory in USDA’s June hogs and pigs report to be a fraction of one percent larger than June 2006. The number of litters farrowed this spring was forecast to be down 0.5 percent, so the June 1 market hog inventory should be fairly close to last year. Hog death losses from Circo virus continue to plague the industry. An adequate supply of vaccine could add a significant number to hog slaughter.

The June lean hog futures contract ended the week at $72.87 per cwt., down $2 from last Friday. The July contract settled at $73.75 today, down $1.04 for the week. August closed the week at $73.37 per cwt. and October settled at $67.50.

Readers with questions or comments for Grimes or Plan may write to them in care of this publication.

This farm news was published in the June 13, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.