October 18, 2004

 

 

US Pork Exports Favorable Through August

 

Total US pork exports for August were up 17.6%. The export growth to Japan during August at a plus 18% showed the biggest monthly increase for the year. However, Mexico continues to be the big gainer with a 45% increase during August. Even though mainland China was not a big importer of US pork, the country continued a very healthy growth during August at a plus 51%.

 

Pork exports for January - August were up 23.3% from 2003. Japan purchased 7.4% more pork for the first eight months of 2004 than a year earlier. Canada's buy was up 26.7%, Mexico up 67.1%, Russia up 159.8%, China (mainland) up 73.2% and Taiwan was up 41% for January - August compared with a year ago.

 

Pork imports rose nearly 9% for August compared with the same month in 2003. For the first eight months of this year, pork imports were down 6.4% compared with the same period last year.

 

Feeder pig imports for August were up 14.5% from a year earlier, but slaughter hog imports for August were down 6.8% from 12 months earlier. For January - August feeder pig imports from Canada were up 20% and slaughter hog imports were up 35.1%. Total live hog imports for these eight months grew 26.5%.

 

Slaughter hog imports for both July and August from Canada have been below levels a year ago. Therefore, the increase we have in slaughter since July appears to be domestically fed hogs.

 

Barrow and gilt weights in Iowa and Minnesota for the week ending October 9th were down 1.4 pounds per head from a year earlier. However, the average carcass weight for the same week for hogs produced by independent producers were up about 0.9 pounds on average, based on data from the mandatory price reports.

 

When we looked at the Iowa-Minnesota data we were about ready to conclude that the market inventories in the September Hogs and Pigs report were more accurate than we believed. However, the carcass weights indicated we are not as current with the marketings as we were the same week listed above in 2003. We also have trade reports indicating slaughter of hogs for the next week are likely to be around 5% from a year earlier.

 

Packers continue to push hog prices lower this week in an effort to improve their margin. Cash prices for live hogs this Friday were $2.00 to $4.50 per cwt lower than a week earlier.

 

The top prices live Friday morning at the following markets were: Peoria $45.00 per cwt, St. Paul $48.00, Sioux Falls $50.00 and interior Missouri $47.25.

 

Carcass prices for 185 pound carcass weighted average with 0.9-1.1" back fat 6 square inch loin 2" deep were from $3.59 to $4.82 lower this Friday morning than 7 days earlier.

 

The prices for 185 pound carcass by area this Friday morning were: western Cornbelt $67.05 per cwt, eastern Cornbelt $66.95, Iowa-Minnesota $67.26 and Nation $67.00.

 

Hog producers received good news this week with USDA estimates of a record 11.6 billion bushel corn crop and a 3.1 million bushel soybean crop. The bean crop is also a record high.

 

USDA reduced their estimated corn prices for the corn marketing year to $1.95 per bushel form $2.20 per bushel based on the September estimate. This compares with a $2.42 average corn price per bushel in the 2003-04 marketing year. USDA projected price for the soybean meal per ton for the 2004-05 marketing year is $165 per ton. This compares with a $256 per ton for the 2003-04 marketing year.

 

Cash feeder pig prices at United Tel-o-auction this week were around $10 per cwt higher than two weeks ago. This is probably due at least in part to the excelled corn and bean crop.

 

The prices by weighted groups at United this week were: 40-50 pounds $115 per cwt, 50-60 pounds $110 and 60-70 pounds $93-100.

 

Slaughter this week under federal inspection was estimated at 2150 thousand head up 1.4% from a year earlier.

 

The US Commerce Department found Canada guilty of dumping hogs on the US market. The tariff, which is some different for some entities but will roughly be between 13.25% and 15% of value. The tariff will become effective when printed in the Federal Registry on or about October 20, 2004.