US April hog shows highest profits since 2006

The average market hog was sold the highest in April at a profit of US$29.39 per head, the most profitable since August 2006 and only the fourth in the last 31 months, according to John Lawrence of Iowa State University.

Lawrence estimates cost of production at US$50.91 per hundredweight live, the lowest since December 2007.

The Mandatory Price Reporting system daily peak was US$67.80 per hundredweight on a live basis and US$86.83 per hundredweight on a carcass basis, both on August 11, 2008.

Cash receipts from US hog sales totalled US$14.4 billion last year, down US$1.7 billion from 2008 according to USDA/NASS. The top three states - Iowa, North Carolina and Minnesota – accounted for 55.3% of cash receipts. The top 10 hog states had 86.6% of the total cash receipts from hog sales.

Loins were higher this week but hams and pork bellies were lower. The record high pork cutout value was US$94.41 per hundredweight on August 15, 2008.

The national weighted average carcass price for negotiated hogs Friday (May 7) morning was US$85.47 per hundredweight, US$2.99 higher than the previous Friday (Apr 30). Regional average prices on Friday (May 7) morning were: eastern corn belt US$85.46, western corn belt US$85.53, and Iowa-Minnesota US$84.52 per hundredweight.

This week's hog slaughter totalled 1.992 million head, down 1.8% from the week before, and down 1.2% compared to the same week last year. This was the first non-holiday week with slaughter below 2 million head since July.

The May lean hog futures contract ended the week at US$88.50 per hundredweight, down US$1.02 from the previous Friday (Apr 30). The June contract settled at US$85.52, down US$0.80 for the week. July closed the week US$0.20 lower at US$86.02 per hundredweight and August ended the week at US$86.30 per hundredweight.