Hog price drop temporary
United States packers had sufficient hogs available for the shortened kill week and so reduced their bids as the week progressed.
Manitoba Agriculture said Iowa-southern Minnesota hog prices (plant top, 51-52 percent lean, live equivalent) decreased from $41 (U.S.) per hundredweight on Dec. 27 to $38.50 per cwt. on Dec. 29.
Prices could improve with better demand or as weekly hog slaughter falls closer to 1.9 million head, which is likely in early winter.
The U.S. Department of Agriculture Dec. 1 hogs and pigs report was close to expectations and had little impact on the market.
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There were four percent fewer hogs in the 179 pound and under categories and five percent fewer in heavier weight ranges.
This could cause a four to five percent decrease in hog slaughter in the first quarter and a four percent drop in the second quarter.
The number of sows farrowed or expected to farrow between December 1999 and February 2000 was three percent lower than a year earlier, which when combined with slightly larger litter sizes, could mean about three percent fewer hogs coming to market in the second half of the year.
With steady to lighter hog carcass weights, U.S. pork production is expected to drop by three to four percent in 2000, said Manitoba Agriculture. The department believes packers might overreact to shortages or surpluses causing some volatility.
The weaker U.S. market and stronger Canadian dollar had a negative effect on Manitoba hog prices last week. The average Index 100 hog price, including premiums, declined to an estimated $133 per100 kilograms for the week.
Few cattle at market
There is no Canfax report this week.
Manitoba Agriculture said there were almost no cash sales of cattle in the U.S. until the middle of last week, when packers were willing to pay $68 (U.S.) per cwt. for Choice steers to top up supplies for the four-day slaughter week.
Wholesale beef prices declined early in the week, encouraging the movement of beef through the system and perhaps limiting the decline in cattle prices expected early in the new year after the millennium-end, beef-eating binge is over.
Fed cattle prices should trend upward in January and rise seasonally in late winter to early spring.
U.S. Choice steer prices could average $65-$70 per cwt. in the first quarter of 2000, rise to $67-$72 in the second quarter, decline seasonally to $65-$70 in the third quarter and increase to $67-$71 per cwt. in the fourth quarter.
American analysts think smaller supplies of stocker and feeder cattle will force competitive bidding all year. Also, there is a smaller supply of cattle grazing on winter wheat fields this year. Dry conditions in the U.S. south forced many farmers to abandon grazing plans and some to move cattle off winter pasture early.
