Grimes and Plain Weekly Hog Outlook

CHICAGO - Sep 12/08 - SNS -- Following is a week ending hog market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Pork cutout peaked at $94.41 on Monday, August 18, then declined for

12 consecutive trading days to $77.20 or over 18 percent. This was a

decline in value of over $34 per hog. The cutout was up slightly on

Friday, September 5, but declined $1.49 per cwt of pork on Monday and

was at $75.06 per cwt on Thursday afternoon, down $2.14 per cwt from a

week earlier.

The odds are high that we have lost some of the export demand. We will

have July data next week but all indications showed that export demand

stayed strong until mid August. We will not have August information

until about mid October. In fact, we may not get the true signals

until we get the November releases for September shipments.

Slaughter in the fourth quarter is expected to be up about 2.5 percent

from the record slaughter in the fourth quarter of 2007 at nearly 30.4

million head. Slaughter for the 11 full weeks in the fourth quarter

will need to average about 2.4 million weekly or only 70 thousand head

per week below the record high slaughter of 2470 thousand head last

December. Unless we lose a slaughter plant for some reason, we should

have enough slaughter capacity to squeak by this fall and early winter

without real big problems.

Our preliminary estimate is that the September 1 breeding herd in the

U.S. was 96.5 percent of a year earlier.

Pork product prices Thursday afternoon showed loins at $93.64 per cwt

were down $3.56 per cwt, Boston butts at $79.78 per cwt were down

$3.61 per cwt, hams at $70.32 per cwt were down $2.00 per cwt, and

bellies at $175.59 per cwt were down $1.84 per cwt from seven days

earlier.

Barrow and gilt weights live in Iowa-Minnesota last week at 259.4

pounds were one pound below a week earlier and a whopping 5.5 pounds

below a year earlier. This is the biggest decrease form a year earlier

since 1983. Producers are responding to the high feed price by pulling

down weights.

Feeder pig prices at United Tel-O-Auction this week were steady to

$7.00 per cwt higher than two weeks ago. All of the United pigs

weighed between 50 and 60 pounds and sold from $60-$77 per cwt.

Live hog prices this Friday morning were steady to $1 per cwt lower

compared to a week earlier. Weighted average negotiated carcass price

Friday morning were $1.47 to $4.86 per cwt lower compared to seven

days earlier.

The top live prices for select markets this Friday morning were:

Peoria $46 per cwt, Zumbrota, Minnesota, $48 per cwt, and interior

Missouri $49.25 per cwt. The weighed average negotiated price by area

were: western Cornbelt $69.25 per cwt, eastern Cornbelt $66.77 per

cwt, Iowa-Minnesota $69.57 per cwt and nation $67.91 per cwt.

Slaughter this week under Federal Inspection was estimated at 2306

thousand head, up 3.5 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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