July 26, 2004

US Retail Pork Prices In June Increased 2.5% From May

US hog slaughter continued very large this week with an estimated Federal Inspection number at 1.892 thousand head. This week's slaughter was slightly below 1.9 million head. Prior to last week, a weekly slaughter of 1.9 million head under Federal Inspection in July had never been observed.

Hog prices held quite well with this big slaughter which was 4.1 percent above a year earlier for the week. Live hog prices were from $1.50 lower to $2.00 higher this Friday than 7 days earlier. Carcass prices were $0.67 lower to $0.65 higher compared to a week earlier.

For January-May pork exports were up 27.9% and pork imports were down 8.5 percent. We increased pork exports to all major countries that buy from us but South Korea in January-May.

Retail pork prices in June increased by 2.5% from May, and June prices in 2004 where 7% higher than a year earlier. Retail pork prices for January-June this year were up 4.4% from 12 months earlier.

The producers were able to capture more of the consumer dollar than the increase in retail prices. Based on the USDA data, the processors and retailer margins were 3.4% less than the same months of 2003 and the packers margin was also down 3.4% for this period compared to last year.

51-52% live lean hog prices for January - June were up nearly 27% from the same period in 2003.

Cold storage stocks of pork continue to be supportive to hog prices. Total stocks at the end of June were down 18% from the same date in 2003. Ham stocks were down 40%, belly stocks were down 15%, loin stocks were down 16% and rib stocks were down 30% from last year on June 30th.