December 17, 2009

The average weight for slaughter hogs in Iowa/southern Minnesota last week was down 1.4 pounds from the previous week, normally a bullish signal, but analysts and traders await the next report for confirmation.

Lighter hog weights can be an indicator that producers are more current, or up to date, on their marketings. When weights are lighter, producers may have more leverage when negotiating with packers since they are not as hard pressed to sell right away, analysts and livestock dealers said. In addition, less weight on the hogs means not as much pork is produced from each animal or in total as there would otherwise be.

Many of the analysts and dealers are taking a wait-and-see approach after the latest weights report was released by the US Department of Agriculture early Wednesday. They said the season's first major snowstorm that swept across Iowa and surrounding states last week caused a significant disruption in livestock shipments and slaughter schedules at midweek. And that may have been enough to alter the average weight figure.

Rich Nelson, director of research at Allendale Inc. in McHenry, Ill., said he will wait to see what the next report shows. Weights data for this week's s slaughter will be released next Wednesday.

Some analysts and dealers said they had expected a decline in the average weight, but a more modest one. The recent trend has been for weights to come off a bit more from the seasonal peak of 271.3 pounds set during the week ended Nov. 7. The average has dropped in three of the five weeks since for a net decline of 2.8 pounds. That amounts to about 2.1 pounds less pork per head, which on a 2.3 million-head weekly slaughter would be 4.8 million fewer pounds of pork produced.

It's possible that lower quality corn containing more mould this year than is normally seen may also be a factor in the decline in weights in recent weeks, livestock dealers and analysts said. If the feed is made from corn that has too much mould in it, it may not be as appealing to the hogs and so they don't eat as much and therefore won't gain weight as fast as they would on top-grade corn. The downturn in the weekly average since early November coincides with the increase in feeding of new-crop corn, they said.