Since September 1 barrow and gilt slaughter has averaged roughly 0.7% above the level implied by the September market hog inventory. That report implies December daily hog slaughter would be down 1.2 percent.
Thus far in 2012, barrow and gilt slaughter is up 2.0 percent compared to last year. Sow slaughter is down 0.6 percent despite a slight increase in cull sow imports from Canada. This data imply modest growth in the breeding herd. Our gilt slaughter data indicates the breeding herd was declining in late summer and early fall when corn prices were climbing. The last few weeks imply some herd growth.
Thursday afternoon calculated pork cutout value was $85.15/cwt, up 96 cents from the previous Thursday. Hams and butts were lower, but loins and bellies were higher this week. The pork cutout value is $4.15/cwt lower than a year ago.
The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.85/cwt, up $1.09 from last Friday. The eastern corn belt was $1.56 higher than last Friday at $82.00/cwt. Neither the western corn belt nor Iowa-Minnesota had enough early morning sales for a price quote. Peoria had a top live price this morning of $54 and Zumbrota had a live top today of $55/cwt. The top for interior Missouri live hogs Friday was $60/cwt, up $2.75 from the previous Friday.
The average hog carcass price is 96.1 percent of the cutout value, which is quite high for this time of year. Don't be surprised if packers slow buying early next week to try to restore their profit margins.
Hog slaughter this week totaled 2.364 million head, down 1.5 percent from the week before, but up 1.5 percent compared to the same week last year. Year-to-date hog slaughter is 1.9 percent above 2011.
The average barrow and gilt live weight in Iowa-Minnesota last week was 275.2 pounds, 0.8 pounds above a week earlier, but down 1.0 pounds from a year ago. This was the tenth consecutive week with weights under the year-ago level.
Friday's close for the December lean hog futures contract was $82.30/cwt, down $1.77 from the previous Friday. February hog futures ended the week $3.45 lower at $83.47/cwt. April hogs settled at $88.47/cwt; June at $98.20/cwt.