March 1, 2004

 

US Pork Prices Up As Demand Strengthens

 

Pork demand continues to strengthen at both consumer and live hog levels. Consumer demand rose 3.7% in the fourth quarter while live hog demand was up 9.2% from a year ago.

 

Pork demand is on the rise as a result of the bird flu outbreak, however, should the epidemic persists and continue to disrupt broiler exports, it could be detrimental to pork demand.

 

Pork exports to Japan in December fell nearly 15% from a year earlier. However, exports to Canada rose by more than 25% and to Mexico over 55%, giving a total increase in December exports of 8% compared to a year earlier.

 

Retail pork prices in January were up about 0.5% from December of 2003. The January 2004 price was up 4.3% from a year earlier.

 

The producers gained the most from the higher retail prices this year in January than in 2003.

 

Live hog prices were up 13.5%, the processor-retailer margins were up 1.1%, but the packers' margin was down 3.9% in January from 12 months earlier.

 

Fourth quarter demand remains strong pushing pork production in January up about 5% and live hog prices up 15%.

 

A substantial portion of this demand growth is due to the recent high beef prices.

 

Pork product prices this week were mixed. Loins with a ¼" trim at $106.00 per cwt this Friday were down $4.75 per cwt, Boston butts with a ¼" trim were up $6.09 per cwt at $76.00 per cwt, hams were $56.25 compared to $56.00 last Friday and 14-16# bellies at $100.00 per cwt were up $5.00 for the 7 days.

 

Live hog prices were the same to down some this Friday compared to a week earlier. Prices at the markets reported Friday morning were steady to $1 higher from a week earlier. These top live prices were: Peoria $40.00 per cwt, St. Paul $42.00 per cwt, Sioux Falls $44.00 per cwt and interior Missouri $43.00 per cwt.

 

The average weighted prices for 185# carcasses with 0.9-1.1 inch-back fat 6 square-inch loin 2 inches deep were down $0.80 to $1.49 per cwt from a week earlier on Friday morning.

 

These prices by reporting area were: western Cornbelt $59.15 per cwt, eastern Cornbelt $60.02 per cwt, Iowa-Minnesota $59.57 per cwt and nation $59.62 per cwt.

 

Slaughter this week under Federal Inspection at 1960 thousand head was up 1.8% from a year earlier and up 3.4% from a week earlier, which was reduced some by the Presidents Day holiday.

 

Cold storage stocks of pork on January 31 were down 0.4% from a year earlier, belly stocks were up sharply this year at the end of January compared to a year earlier but were very low a year earlier.