October 29, 2007

 

US wholesale pork prices hit 1 1/2 - year low on supply pressure

 

 

US wholesale pork prices this week hit the lowest level since April 12, 2006, pressured by record-large hog slaughters this month and prospects for the hefty supplies to continue for the foreseeable future.

 

The US Department of Agriculture quoted the pork cutout value Friday (October 26) at US$59.25 per hundredweight, down US$0.62 from Thursday. For the week, the pork cutout fell US$2.78, or 4.5 percent.

 

Last week's slaughter was the fourth consecutive above 2.3 million head, a level never before achieved until this month. Preliminary data put the average for these latest four weeks at just under 2.330 million, up 7.2 percent from a year ago. The monthly total is expected to reach about 10.590 million head, a new record.

 

Market analysts and brokers said given the huge supplies, pork prices have held up better than some had expected. Demand has been strong enough so far to keep pork and hog prices from collapsing as they did in late 1998.

 

Glenn Grimes and Ron Plain, agricultural economists at the University of Missouri, said in their weekly pork outlook report released Friday afternoon that "the price of hogs is holding up very well with this level of slaughter, which is up about 7 percent from 2006."

 

They also said weekly slaughter rates have probably not yet reached the high for the year. Slaughter will continue to be large with the high likely coming in early December, they said.

 

Wholesale beef prices were under pressure as well. The US Department of Agriculture's choice beef quotes declined in four of the five days and lost US$3.05, or 2.1 percent, for the week. Select price declined each of the five days, ending US$3.51, or 2.6 percent, below a week earlier. Friday's select beef price was the lowest since December 29, 2006, while the choice beef quote was the lowest since July 30.

 

CATTLE/HOG SLAUGHTERS

 

US cattle slaughter for the week was estimated at 670,000 head, compared with 674,000 a week ago and 649,000 a year ago. Year-to-date slaughter stands at 27.935 million head, up 1.5 percent from a year ago.

 

Hog slaughter for the week is estimated at 2.324 million head, compared with 2.345 million last week and 2.182 million a year earlier. Year-to-date hog slaughter is estimated at 87.371 million head, up 3.1 percent from a year ago.

 

TOTAL MEAT PRODUCTION

 

The USDA estimated total beef, pork and lamb production for the week at 1.002 billion pounds. Last week's output was 1.007 billion, and the year-ago figure was 952.6 million. Year-to-date combined meat output is 39.313 billion pounds, up 1.9 percent from last year.

 

Broiler/fryer slaughter for the week was estimated at 168.138 million head, compared with 169.642 million a week ago and 164.244 million a year ago.