Grimes and Plain Weekly Hog Outlook

CHICAGO - Sep 19/08 - SNS -- Following is a week ending hog market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Pork exports in July were down 12.2 percent from June but up 84.7

percent from July of 2007. Pork exports for January-July were up 70.8

percent from a year earlier.

Pork exports in January-July to Japan were up 21.8 percent, up 37

percent to Mexico, up 25.7 percent to Canada, up 23.2 percent to South

Korea, up 144.2 percent to Russia, up 376 percent to China-Hong Kong,

up 20.5 percent to Taiwan, up 25.1 percent to Australia and up 119.7

percent to other countries compared to last year.

Pork imports for January-July were sown 15 percent from a year

earlier. Net exports of pork as a percent of production for

January-July at 17.9 percent was up 8.7 percentage points from 9.2

percent a year earlier.

These net exports explain most of the difference in live hog demands

for January-July, which was up 8.9 percent while pork demand was down

3.9 percent at the consumer level.

The value of pork exports per hog slaughtered for January-July at

$35.89 per head was up 45.8 percent from last year. The value of pork

variety meats per hog slaughtered for January-July at $11.13 was up

39.3 percent from 12 months earlier. Total pork and pork variety meat

exports for January-July was $47.02 per hog slaughtered, up from

$32.61 a year earlier.

USDA September 1 Crop report showed this year's corn yield at 152.3

bushels per acre, down from an estimate of 155 bushels per acre in

August. The USDA estimated corn price for the 2008-09 market year $5-6

per bushel. The 2007-08 market year corn price was $4.20 per bushel.

This will increase the cost of producing hogs by $4-9 per cwt in the

coming year compared to 12 months earlier.

Retail pork price in August were up 1.9 percent from July and up 2.9

percent from August of 2007. For January-August retail pork price were

up 1.3 percent from a year earlier. Only the marketers benefited from

the higher retail prices. The processor-retailer margin was up 1.8

percent and the packers' margin was up 8.6 percent from 12 months

earlier. The producer’s average price for January-August was down 1.2

percent from 2007.

The average live weight of barrows and gilts for last week was up 2.5

pounds from a week earlier at 261.9 pounds. However, this weight is

still 4.3 pounds per head below a year earlier. Some people believe a

portion of this reduced weight is due to some producers feeding

distillers dried grain which reduces the rate of gain. However, we

still believe a portion of the reduction in weight is due to high feed

prices.

Pork cutout stabilized this week and gained a little with the cutout

Thursday afternoon at $76.95 per cwt was up $1.89 per cwt from a week

earlier.

Loin price at $92.94 per cwt were down $0.20 per cwt, Boston butts at

$78.08 were down $1.70 per cwt, hams at $77.36 per cwt were up $7.04

per cwt and bellies at $80.94 per cwt were up $5.35 per cwt from seven

days earlier.

The live prices for hogs Friday morning were $2.00 to $3.00 per cwt

lower compared to a week earlier. The weighted average carcass price

Friday morning were $0.34 per cwt higher to $1.61 per cwt lower

compared to last week.

The top live prices by market for Friday morning were: Peoria $44.00

per cwt, Zumbrota, Minnesota, $46.00 per cwt and interior Missouri

$46.75 per cwt. The weighted average carcass price by area Friday

morning were: western Cornbelt $69.59 per cwt, eastern Cornbelt $65.16

per cwt, Iowa-Minnesota $69.72 per cwt and nation $67.10 per cwt.

Slaughter this week under Federal Inspection was estimated at 2335

thousand head, up 4.1 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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