May 23, 2005

US retail pork prices up 5 percent

Retail pork prices in the US for April were up 1.3 percent from March and 5 percent year on year.

Marketing margins were mixed for the first 4 months of 2005. The processor-retailer margin was up 1.6 percent but the packers margin was down 1.6 percent from a year earlier. The total marketing margin was up 1.2 percent for January-April compared to the same months in 2004.

Live hog prices in April were 5.5 percent above 12 months earlier. For the first 4 months of 2005, live hog prices were up 14.6 percent from a year earlier. For January-April the higher retail prices were split between the marketer and producers.

Slaughter hog weights continue to run well above a year earlier. For the week ending May 14, the estimated live weight for hogs in Iowa-Minnesota was 267.8 pounds per head --- up 4.5 pounds or 1.2 percent from the same week in 2004.

The relatively low feed prices along with good slaughter hog prices are probably the major drivers for heavier weights. However, the record high feeder pig prices are probably also contributing to feeding to heavier weights.

There are strong economic incentives to produce heavier hogs. The packers costs are per head and the producers reduce cost by adding weight because of the per head cost of feeder pigs.