August 3, 2009

Wholesale pork prices fell sharply this week amid a larger hog slaughter and heavier animals that resulted in a 3.6-percent increase in pork output for the week.

 

Friday's (Jul 31) pork carcass composite value, commonly known as the pork cutout, was US$59.41 per hundredweight, which was down US$5.59, or 8.6 percent, from a week ago. The week's slide in pork prices put Friday's cutout at just 68.6 percent of the year-ago quote.

 

Slaughter this week was the largest since the period ended April 24, according to the USDA. While this week's head count processed was up 0.5 percent from a year ago, the heavier carcass weights added about 3.1 percent, or nearly 12.6 million more pounds, to the pork output.

 

Unusually mild temperatures across the Midwest throughout the month have allowed the hogs to gain weight faster. In addition, reduced slaughter rates earlier in the month may have held some hogs back that would otherwise have been shipped off the farms.

 

Glenn Grimes and Ron Plain, agricultural economists at the University of Missouri, in their latest hog outlook report released Friday said "there are no questions about hog marketings being backed up some in the summer of 2009."

 

Cash hog prices fell this week as well, pressured by the declines in pork values and with some plants taking Monday off. The USDA's national weighted average hog price Friday was the lowest since May 6.

 

Three plants will be closed for a floater holiday and three others will be dark due to reduced summer slaughter schedules. Combined, the closures will take about 100,000 head out of that day's slaughter.

 

Analysts and livestock dealers predict further pressure is possible on cash hog prices early next week from the restricted slaughter schedules and ample supplies of hogs that appear to be available.

 

This week's cattle slaughter was estimated at 639,000 head, compared with 615,000 a week ago and 662,000 a year ago. Year-to-date cattle slaughter is down 5.1 percent from a year ago.

 

The week's hog slaughter estimate was 2.104 million head, compared with 2.030 million a week ago and 2.093 million a year ago. For the year, hog slaughter is off four percent.

 

The USDA estimated total beef, pork and lamb production for the week at 922.8 million pounds. Last week's output was 888.4 million pounds, and the year-ago figure was 929.7 million pounds. Year-to-date output is down 3.6 percent.

 

Broiler/fryer slaughter for the week was estimated at 163.733 million head, compared with 160.744 million a week ago and 166.665 million a year ago.