"We appear to be doing the same thing price-wise this August as we did last year. Unless hogs weaken substantially in the next week, we will have a higher average price in August than July," says Glenn Grimes, University of Missouri agricultural economist.
Until last year, higher prices for hogs in August than July occurred only when the production cycle was on the decline. Previously, 1999 was the last year that August hog prices exceeded July's. That year, August pork production was up 5.1 percent from July levels. In 2005, August production 16.3 percent higher than in July. "We certainly did not decrease production as we moved through 2005 compared to 2004," he notes.
Last week was another good one for hog prices. Friday morning's quotes were 50 cents per hundredweight lower to $14.50 higher compared to the previous week. "Weighted average carcass prices last Friday were $1.81 to $3.82 per hundredweight higher compared to seven days earlier," says Grimes.
Federally inspected slaughter last week was estimated at 2,003,000 head, up 1.3 percent from a year earlier.
Average hog weights (Iowa/Minnesota) gained a pound last week from the week earlier, and those weights were 1.8 pounds above those in 2005. "The odds are low that we have pulled marketings forward in recent weeks," says Grimes.
Source: Glenn Grimes, Ron Plain, University of Missouri.