Sow prices dip from recent peak, USDA purchase cancelled

US sow prices have weakened from a peak hit last week in which values at some locations hit record levels.

 

Industry participants and analysts said the sow market could not sustain the extremely high levels achieved early last week.

 

Fewer sows available for processing following herd cutbacks in the US and Canada the past two years and a mid-February invitation by the USDA to buy 4.788 million pounds of cooked sausage patties made from sow meat only contributed to the price surge.

 

The USDA reported prices for negotiated and formulated sales of sows last week were up more than US$4 per hundred pounds in most weight categories. That represented gains of 7.3%-9.7% for animals weighing 450 pounds or more.

 

Late Friday (Feb 26), however, the USDA rejected all offers for the cooked pork patties "due to price considerations." The USDA's release, which was posted on its website early Monday (Mar 1), said the "rejected offer prices for the frozen cooked pork patties ranged from US$2.4370-US$2.9642" per pound.

 

The last invitation for cooked pork patties by the USDA was in September, and nearly 12.2 million pounds were purchased. The awarded offers ranged in price from US$1.6800-US$1.9379 a pound.

 

Analysts and livestock buyers said the sow market ran out of steam late last week after prices had become too high. Prices for sows, especially the heavier, better-conditioned animals, were at a premium of several cents a pound over the butcher hog market.

 

Due to tightened sow supplies and squeezed processing margins, several sausage makers recently reduced their operations to four days a week, livestock dealers said. Some have also purchased heavyweight butcher hogs, consisting of younger females and castrated male pigs, to supplement their sow supplies just to have enough animals to keep their operations running.

 

Since the USDA rejected all offers in the pork patty invitation, sow prices are expected to decline, but how far the market adjusts downward could depend upon the availability of culled females from the breeding herd.

 

Prices for sows at some livestock buying locations have already slid US$3 to as much as US$8 from last week's tops.