May 24, 2011
US April retail pork prices break record
US retail pork prices attained a new record in April as the average price of pork in grocery stores last month was US$3.377/pound, an increment of US$0.02 from March, up US$0.458 from last April, and US$0.014 more than the previous record high set in October 2010.
The seasonal pattern is for retail pork prices to trend higher until August. However, packer margins usually widen after May, lessening the benefit for hog producers of higher retail pork prices. The farmer's share of the retail price was 34.9% in April, the highest of any month since last May and the highest April since 1997.
The national average negotiated carcass price for direct delivered hogs on the morning report yesterday (May 23) was US$92.13/cwt, up US$2.75 from last Friday (May 20). The eastern corn belt average price this morning was US$91.41/cwt while the western corn belt average was US$94.42/cwt. Iowa-Minnesota hogs averaged US$94.55/cwt on the morning report, the second highest morning price ever behind Thursday (May 19) morning's US$96.38/cwt. Friday's (May 20) top live hog price at Peoria was US$65/cwt. Zumbrota's top was US$63/cwt. The top for interior Missouri hogs was US$64.50/cwt, up US$1.50 from the previous Friday (May 20).
The pork cutout value is higher for the second consecutive week. Monday's (May 23) cutout, US$98.31/cwt, was a record. USDA's Thursday (May 19) afternoon calculated pork cutout value was US$96.61/cwt, up US$1.61 from the previous Thursday (May 19). Hams, loins, butts, and bellies were all higher. Yesterday (May 23) morning's national average hog carcass price was 95% of the pork cutout value. This is higher than normal. Tight margins may eventually force packers to cut their schedules in the face of fewer hogs. The first 3-day weekend of the summer is coming up. How well meat sells for Memorial Day is often a good indicator for summer demand.
Hog slaughter totalled 2.021 million head this week, up 2.2% from the week before and up 0.5% compared to the same week last year. Year-to-date hog slaughter is down 1.2%, but due to heavier weights, year-to-date pork production is up 1%.
Barrow and gilt carcass weights for the first week of May averaged 204 pounds, one pound lighter than a week earlier, but three pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 270.8 pounds, down 0.9 pounds from the week before, but up 0.5 pounds compared to the same week last year. This is the closest Iowa-Minnesota weights have been to the year-ago level since September.
The June lean hog futures contract ended the week at US$91.97/cwt, down US$2.58 from the previous Friday (May 20). The July contract settled Friday (May 20) at US$92.32/cwt, down US$1.53 for the week. August hogs settled at US$93.50 and October hogs ended at US$86.50/cwt.
