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| Study shows producers use hog futures market |
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| A relatively high percentage of hog producers use the hog futures market based on a study just completed by the University of Missouri and Iowa State University with financial support from the National Pork Board, Pig Improvement Company and Pork Magazine. (See Table 1)
There are a number of reasons why producers do not use futures or options. Based on the study mentioned above, the following reasons were given by hog producers for not using futures market. (See Table 2)
The demand for all meats but broilers was up for January-July of 2007 compared to a year earlier. Consumer pork demand for this period was up 1.7 percent, beef was up 0.8 percent, turkey was up 2.2 percent but broiler demand was down 1.1 percent compared to the same months of 2006. However, broiler demand has improved substantially in recent months.
Live hog demand and live fed cattle demand for January-July shows good growth with hog demand up 3.3 percent and live fed cattle demand up 3.9 percent from a year earlier.
Live slaughter barrow and gilt weights last week in Iowa-Minnesota at 263 pounds were up 1.7 percent from a week earlier and up 1.4 percent from the same week last year. With cooler weather over the next few weeks, it is likely weights will continue to get higher.
The highest live slaughter weight for barrows and gilts last fall and early winter was 271 pounds per head, but a year earlier we had one week with weights at 273.8 pounds. We probably will get close to the 273.8 pounds this year but might not equal or exceed it.
Pork cutout this week per cwt. of carcass at $67.72 per cwt. was down $0.64 per cwt. from a week earlier. Loins were up $1.71 per cwt. from seven days earlier at $83.84 per cwt.,Boston butts at $61.92 per cwt. were down $0.87 per cwt., hams were down $3.13 per cwt. at $56.99 per cwt. and bellies were down $3.36 per cwt. at $83.54 per cwt.
Live hog prices Friday morning were $2-3 per cwt. lower compared to a week earlier. Weighted average carcass prices under negotiated trade were down $1.95-3.04 per cwt. lower compared to seven days earlier.
The live prices Friday morning for select markets were: Peoria $39, St. Paul $41 per cwt. and interior Missouri $42 per cwt. The weighted average carcass prices by area were: western Corn Belt $59.99 per cwt., eastern Corn Belt $58.44 per cwt., Iowa-Minnesota $60.62 per cwt. and nation $58.90 per cwt.
This farm news was published in the Sept. 12, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 9/12/2007 |
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