Statistics Canada says the Canadian hog herd on July 1 was 1.5% larger than a year ago and their breeding herd was up 1%. Despite a larger sow herd, Canadian producers say they will farrow 1.4% fewer sows in the third quarter of 2012 and 1.3% fewer in the fourth quarter compared to a year earlier. Pigs born per litter during the second quarter of 2012 were up 1.5% from a year ago. It seems reasonable to expect the Canadian pig crop in the second half of 2012 to be close to year-ago levels.

Domestic pork demand was down 6% in June compared to 12 months earlier. Fortunately, export demand was up 5% leaving hog demand down only 1.7% compared to June 2011. Domestic meat demand was down 1% during the last 12 months.

The latest Cold Storage report says the amount of pork in cold storage at the end of July was down 8% from June, but up 20% from a year ago.

Corn and soybean meal prices continue to set records. Based on current futures prices, it looks like breakeven prices for hogs will average close to $90/cwt of carcass both this year and in 2014. For 2013, a carcass price of $102/cwt will likely be needed to cover production costs.

The Thursday afternoon calculated pork cutout value was $87.05/cwt, down $3.78 from the previous Thursday and $15.06 lower than a year ago. Loins, butts, hams and bellies were all lower this week. As often occurs this time of year, bellies dropped $11.37/cwt in value as we approach the end of BLT season.

Hog prices were down for the third week in a row. The national average negotiated carcass price for direct delivered hogs on the morning report today was $79.86/cwt, down $5.05 from last Friday. The eastern corn belt was down $4.59 to $80.09/cwt and the western corn belt fell $6.21 to $79.71. Iowa-Minnesota dropped $5.47 to $80.52/cwt. Peoria had a top live price this morning of $52 and Zumbrota had a live top today of $56/cwt. The top for interior Missouri live hogs Friday was $58.50/cwt, down $6.00 from the previous Friday. Today's average hog carcass price is 91.7% of the cutout value.

Hog slaughter this week totaled 2.265 million head, up 4.6% from the week before and up 6.7% compared to the same week last year. Typically, daily hog slaughter trends higher from mid August until early December.

The average barrow and gilt live weight in Iowa-Minnesota last week was 267.6 pounds, 1.7 pounds above a week earlier and up 5.2 pounds from a year ago. Weights are up for the third consecutive week which likely means the low for the year is behind us. The stretch of above year-earlier weights dating back to November of 2011 continues.

Hog futures were much lower this week. Friday's close for the October lean hog futures contract was $72.37/cwt, down $3.83 from the previous Friday. December hogs settled at $70.57/cwt, down $3.03 for the week. February 2013 hogs ended the week at $78.52/cwt, down $2.68 from the week before.