Bleak future for hogs
The market impact of United States Department of Agriculture’s June 1 Hogs and Pigs report was worse than most analysts expected.
The report resulted in limit-down losses in lean hog futures and falling cash prices last week.
The Iowa-southern Minnesota hog price fell from $37.25 (U.S.) per hundredweight (plant top, 51-52 percent lean, live equivalent) on June 28 to $25-33.50, mean $30.32, on July 2.
There was good movement of pork through the system, but at lower wholesale prices.
Estimated hog prices in Manitoba averaged $122 (Cdn) per 100 kilograms for the week, down eight percent from the previous week.
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Hog price projections were revised downward. Based on the latest numbers, prices in the third quarter of 1999 could average in the mid-$30s (U.S.) per cwt., while those in the fourth quarter could fall below $30 per cwt.
The University of Missouri weekly hog report by Glenn Grimes and Ron Plain had this to say: “We are killing ourself with productivity growth. The breeding herd was down six percent on March 1, but March-May farrowings were down only three percent and market hog numbers on June 1 were down only two percent.”
However, there is some belief that USDA did not accurately reflect the size of the U.S. breeding herd. Gilt slaughter is above year-earlier levels so some gilts slaughtered under the pseudorabies eradication program may have been missed by USDA.
Cattle prices steady
Fed cattle prices were mostly steady last week, although mixed quality resulted in the heifer average declining $1 per hundredweight, said Canfax.
Volumes were lighter at just over 17,000 partly due to the Canada Day holiday but also because producers decided to wait to see what the anti-dumping preliminary ruling brought.
It turned out to be a 4.73 percent duty on the value of live cattle.
Prices June 30 were steers $83.30-$85.35 per cwt., flat rail $140.35-$143.50 and heifers $82.75-$85.40, flat rail $138.65-$142.
Most wholesale beef prices were lower, in line with the lower cash cattle markets and the lower American beef prices.
The Montreal price was down $2 to $151 per cwt. Calgary wholesales were $1 to $2 lower for this week in a range of $143-$ 151 with heavyweights lower by about $5 to $6.
Beef movement is considered fairly good at the retail level.
The big question this week, said Canfax, will be how Canadian packers react to the U.S. anti-dumping ruling. If they attempt to take most or all of the duty off the price of cattle, producers will export them in hopes of a victory in regards to the final injury case later this year.
But it is also likely that some of the duty amount will be taken off local prices because all the cattle can’t go south.
There will be a fine line between local packers requirements and local supply, Canfax said.
The fact that IBP’s plant in Pasco, Washington, remains in a strike situation is also a concern.
Expected prices this week to be $1-$2 lower.
Cow prices were steady, with many rings reporting cows making up the biggest part of their sales.
Prices for D1-2 cows were $54-$62, with good grain-fed types to $66. D3s had sales from $45-$53, with some up to $56.
The market should be steady this week.
Feeder cattle sales were mostly steady on very light volumes due to the holiday, said Canfax.
Even with a tariff on live cattle exports, producers shouldn’t expect to see a strong impact on the feeder trade initially.
Volumes should be small enough on quality feeders to negate much pressure from buyers, who will be looking to fill orders.
In light stock cow trade: Bred cows $700-$1,050. Cow-calf pairs $1,200-$1,625 on good quality, with medium quality $990-$1,300. Outlook-steady.
