May 4, 2009

US hog and wholesale pork prices were hammered this week by uncertainty in the market place over the recently identified H1N1 influenza, previously known as swine flu.

The viral disease is the suspected cause of 176 deaths in Mexico and one in the US. Although US government agencies and world animal and human health organisations have said pork is safe to eat and no hogs in the US have been found with the virus, some people in the US and abroad have incorrectly associated contracting the disease with the consumption of pork or handling of live hogs.

The Centres for Disease Control and Prevention and the World Health Organisation have reiterated that the disease is transmitted human to human and not from pork or hogs.

Nonetheless, Russia and China, among a few other international customers, have imposed temporary bans on imports of pork from states where cases of the flu have been confirmed. The immediate reduction in export sales along with variable levels of pullbacks in sales regionally across the US this week have resulted in excess pork available for sale despite reduced slaughter schedules.

The USDA on Friday (May 1) reported the pork carcass composite value, commonly known as the pork cutout, at US$55.68 per hundredweight. That was down US$3.60, or 6.1 percent, on the week. The USDA's national weighted average hog price Friday afternoon was quoted at US$54.32, down US$6.65 from a week ago. This week-on-week decline amounted to about US$13.50 per head for a 260-pound hog.

The losses in income to hog producers brought about by the outbreak of the H1N1 flu at a time when prices are normally on the rise could result in a significant downsizing of the industry, analysts and livestock dealers said.

This week's cattle slaughter was estimated at 665,000 head, compared with 644,000 a week ago and 701,000 a year ago. Year-to-date cattle slaughter is down 5.8 percent from a year ago.

The week's hog slaughter estimate was 2.047 million head, compared with 2.140 million a week ago and 2.145 million a year ago. For the year, hog slaughter is off 5.3 percent.

The USDA estimated total beef, pork and lamb production for the week at 940.5 million pounds. Last week's output was 945.9 million pounds, and the year-ago figure was 969.5 million pounds. Year-to-date output is off 4.5 percent.

Broiler/fryer slaughter for the week was estimated at 157.932 million head, compared with 158.718 million a week ago and 168.654 million a year ago.