Grimes and Plain Weekly Hog Outlook

CHICAGO - Jan 5/07 - SNS -- Following is a week ending hog market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

The demand for all meats in the January - November period of 2006 was below a year earlier. Pork demand was down 3.7%, beef demand was down 2.4%, broiler demand was down 6.8% and turkey demand was down 2.2%.

The demand for live hogs and fed cattle continue to be the bright part of the demand picture. Live hog demand for the first 11 months of 2006 was up 0.1% and fed cattle demand was up 3.9%.

Pork demand at the consumer level for September - November was flat with a year earlier and live hog demand was up 2.8% compared to the same months of 2005.

Slaughter barrow and gilt weights continue to run below a year earlier. For the week ending January 30, barrow and gilt weights in Iowa and Minnesota were 0.9 pound below a year earlier and the fourteenth consecutive week for weights below 12 months earlier.

Certainly, weather in recent weeks has been quite desirable for good rates of hog gains. Therefore, the probabilities are near 100% that the high priced corn is providing producers the incentive to market hogs at lighter weights. These lighter weights are likely to continue through 2007 and contribute to slower growth in pork production. Based on the December 1, 2006 Hogs and Pigs report hog slaughter in numbers is likely to be up close to 2% from 2006.

This has not been a good week for hog producers as hog prices have been pushed lower in the holiday-shortened week.

Pork product prices Thursday afternoon at $64.00 per cwt was up $0.91 per cwt from a week earlier. With pork product prices holding fairly steady there is reason to have hope that hog prices will at least improve some with full week slaughter in coming weeks.

Live hog prices Friday morning were $3.25 to $5.00 per cwt lower than a week earlier. The weighted average carcass prices by area were $3.59 to $4.42 below a week earlier Friday morning.

The top live prices for select markets on Friday morning were: Peoria $36.00 per cwt, St. Paul $38.00 per cwt, Sioux Falls $ N/A per cwt and interior Missouri $39.50 per cwt. The weighted average negotiated carcass price by area Friday morning were: western Cornbelt $54.92 per cwt, eastern Cornbelt $55.01 per cwt, Iowa-Minnesota $55.18 per cwt and nation $54.98 per cwt.

Slaughter under Federal Inspection of hogs this week was estimated at 1842 thousand was up, 0.7% from a year earlier.

Cash feeder pig prices were basically steady to possibly a little higher than two weeks ago at United Tel-o-auction. Pigs weighing 50-60 pounds sold from $82.50-100.50 per cwt, 60-70 pound pigs sold at $82.50 per cwt.

Prices for feeder pigs were sharply higher than now at this date in 2006. For the week ending January 7, 2006, 40-50 pound pigs sold for $129.50 per cwt and 60-70 pound pigs sold from $119.000-129.50 per cwt at United.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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