The hog situation


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The hog situation
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United States -- Bureau of Agricultural Economics
U.S. Dept. of Agriculture, Bureau of Agricultural Economics
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Statement of Responsibility:
United States Department of Agriculture, Bureau of Agricultural Economics.
Dates or Sequential Designation:
HS-1 (Nov. 1936)-HS-32 (June 1939).
General Note:
Title from caption.

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University of Florida
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Related Items

Preceded by:
World hog and pork prospects
Succeeded by:
Beef cattle situation
Succeeded by:
Sheep and lamb situation
Succeeded by:
Livestock situation

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Full Text

Bureau of Agricultural Economics
'.'a sh ington

HS-8 June 18, 1937

- - - -


SDEI-I- Summary

If corn crop prospects continue favorable, hog slaughter during the

period from June through September probably will be considerably smaller

than in the corresponding period last year, the Bureau of Agricultural

Economics states. This decrease in slaughter, however, will be about offset

by the larger storage stocks of hog products on hand at the beginning of

June than a year earlier. Consumer demand for hog products is not expected

to change much during the summer months,' and for the period as a whole

demand conditions probably will be somewhat more favorable than they were

last summer.

It is expected, therefore, that hog prices during the June September

period will average higher than in those months last year, when the Chicago

average price was about $9.90. Within this period it is likely that hog

prices will reach a level higher than that reached in late May.

Hog prices rose sharply during May, reaching the highest level in

nearly 8 years. The rise in prices during the month was brought about

chiefly by a marked decrease in hog marketing. Inspected hog slaughter in

May was the smallest for that month in more than 40 years. Storage stocks

of hog products were reduced materially during May, although at the end

of the month they were still considerably larger than those of a year



The decrease in hog slaughter during May reflected the earlier-than-

usual marketing of fall pigs in March and April from some areas, and also

the delay in marketing of such pigs from other areas. Because of the

short supplies and high prices of feed grains, some producers, especially

in the Western Corn Belt, apparently are carrying fall pigs on pasture

for finishing on the new crop of small grains in the late summer and early



BACK' F'UND.- Hog prices advanced steadily from
late November to early January, when the weekly
average price of hogs at Chicago reached $10.41.
Prices declined during the remainder of January
but were fairly steady from February through
April, fluctuating around a level slightly above
$10. Because of the drought of 1936, corn
prices thus far in the 1936-37 marketing year
have been high in relation to hog prices. In
late March and early April the hog-corn price
ratio was near the lowest on record for this
season of the year. stocks of hog pro-
ducts increased greatly from October to February,
and have boon much above average in recent months.

Hog prices rise sharply in May

After little change from January through April, hog prices rose sharply
during the second and third weeks of May. In the week ended May 22, aver-agO
price at Chic:.i;- reached $11.27. Excluding the processing tax in 1935,
whe: prices also wore relatively high, this 'was the highest weekly average
at the Chicago market since July 1929. In late April, before the advance
got under way, the Chicago weekly average price was $10.04. The rise in
prices during May was brought about by a rather marked curtailment in hog
marketing during the month. In early June prices were below the peak of
late ,May, but they were still considerably higher than in late April.

e'-so ,l price f.v.r, :nt unusual

Thus far in 1937, hog prices have moved almost opposite to the usual
seasonal ,:.ttern. In 29 out of the last 37 years lo,; prices in March have
..r..- ed higher than in January, but this year no advance occurred 'recr.
January to March. Foll.oin- the drought of 19'4, hog prices rose sharply in
the first 3 months of 1935 as ir slaughter was reduced materially. With the
1936 *r.: .,ht almost as severe as that of 1934, an advance in hog Trices in
early 1937 similar to that in early 1935 ?.,,.!rcntly was oxpccted by producers
and trade interests, but no advance occurred until about aid-I.y. The rise in
May this y,-.r marked the seventh time in the present century in which prices
in ,-v were substantially higher than in April.


The chief reasons forthe lack of an advance in hog prices during the
period from late February to April 1937 are to be found in the supply
situation for hogs and hog products. Marketing of hogs did not decrease
so much from December through March 1936-37 as they did during that period
in 1934-35, or as they usually do. In addition storage stocks were much
larger last winter than in 1934-35 and much above average. The larger
slaughter supplies and increased stocks apparently were the major factors
which caused the trend in prices thus far this year to be different from
that of 2 years earlier and from most other years.

Hoog slaughter small in May

In May, for the first time in the present hog marketing year which
began last October, inspected hog slaughter was smaller than in the
corresponding month a year earlier. Such slaughter in May, totaling
2,099,000 head, was 25 percent smaller than in April and was the smallest
for the month in more than 40 years. Ordinarily slaughter in May is
considerably larger than in April, since fall pigs usually are marketed
in largest volume in late May and early June. The reduced slaughter in
May this year reflects to a considerable extent the earlier-than-usual
marketing of fall pig3 from some sections and also the delay in marketing
of such pigs from other areas.

The short supplies of feed grains and the unfavorable hog-corn price
ratio caused hogs from the spring pig crop of the preceding year to be
marketed much earlier than usual last fall and winter, and also caused
marketing of fall pigs to begin earlier than usual this spring. With
early marketing of spring pigs, a considerable decrease in hog slaughtor
would hav- occurred from mid-Fobruary to April, but this was prevented
by the early-marketings of fall'pigs from some areas.

Market prices of cash corn were about steady during May but declined
somewhat in early Juno. The average price of No.. 3 Yellow corn at Chicago
in May was $1.35 per bushel, more than twice as high as that of a year
earlier. The average price of corn received by farmers on May 15 $1.21 -
was slightly higher than a month earlier. On the basis of prices received
by farmers about the 15th of the month, the hog-corn price ratio in May
in the North Central States was 8.0, which w.s slightly hirh-r than in
April but much lower than average and considerably lower than a year earlier.

Wholesale prices of fresh pork advanced sharply during the first
3 weeks of May. Prices of cured pork and lard also strengthened. In
late May prices of most cuts of fresh and cured pork were at the highest
level reached thus far in the current hog marketing year, which began
last October.

Stocks of pork and lard reduced in May

Storage holdings of both pork and lardvere reduced sharply in May with
the marked decrease in hc.- szl-ur-hter during the month. Stocks of pork on
June 1, totaling 664 million pounds, were 12 percent smaller than on May 1,
but they were about 50 percent larger than those of a year earlier. Stocks
of lard on Juno 1, amounting to 195 million pounds, were about 7 percent loss


than on May 1, but they were nearly twice as large as those of a year
earlier and were the largest for June 1 on record. Stocks of pork and lard
on June 1 were larger than those of a year earlier by the equivalent of
the products obtainable from about 2 -million hogs of average market weight.

Although stocks of hog products are still considerably larger than a
year earlier, the difference is not so pronounced as in the earlier months
of 1937. If slaughter supplies are reduced in the next few months to
the extent that now seems probable, it is not expected that the storage
supplies during the summer will prove to be burdensome. By the end of the
current marketing year(September 30, 1937) it seems quite possible that
stocks of pork and lard will be reduced Considerably from present levels
and will be no larger than average.

Storage holdings of pork and lard on June 1, average 1932-36,
annual 1935-37 and May 1, 1937

It em

:June 1
:average .June 1,
:1932-36 : 1935

: 1,000
: pounds
Frozen ...................: 162,209
Dry salt, cured and in
process of cure .......: 96,817
Pickled, cured and in
process of cure ........: 351,378

Total ............. 610,404






Lard .............. ........ : 122,175 89,986

.June 1,
* 1936


.May 1, .June 1,
S1937 .1937 1/

1,000 1,000
pounds pounds

96,545 316,670 260,794

85,903 91,068 84,821

258,170 348,616 318,3..

440,618 756,354 663,953

99,656 209,444 195,077

_ Preliminary.

Pork and lard exports increase in APril

Exports of both pork and lard in April were larger than in March,
but they continued at a level far below the avr-,c;e for the 5 years preceding
1935. Total exports of pork in April, amounting to about 5-1/2 million
.ojiwL-, were about a million pounds -L;g..r than in the cori oI ni:.; month of
1936. Most of the increase in exports of pork in April was in shipments
of hams and shoulders to the United -.inLdom, the chief export outlet for
those products.



HS-8 -5-

Lard exports in April, totaling 8.3 million pounds, were 1 million
pounds larger than in March, butthey were more than a million pounds smaller
than in April 1936. Exports of lard to Great Britain increased from March
to April, but shipments to Cuba were reduced. For the period from October
through April 1936-37 exports of lard amounted to about 59 million
pounds, compared with 57 million pounds in the same period of 1935-36 and
322 million pounds in 1933-34. Pork exports from October.through April
1936-37 totaled 34 million pounds, about the same as those of a yearcarlier,
but for the same period in 1933-34 they totaled 37 million pounds.

Pork imports reduced in April

Imports of pork in April totaling about 5.2 million pounds, were
about 2 million pounds smaller than in March and were the smallest for any
months since last December. Pork imports in April, however, were more than
2 million pounds larger than in the corresponding month of 1936.

As indicated in earlier issues of this report, imports of pork in
recent months have been materially larger than in any previous period of
similar length. The aggregate quantity of such imports, however, is still
very small in relation tG the quantity of hog products produced in this
country. For the period from October through April imports of pork totaled
about 38 million pounds. Imports of pork and live hogs during this 7 months
period were equivalent .to about 390,000 hogs of av,' .- market weight.
Inspected hog slaughter in the United Status from October through April
amounted to 24,669,000 head, or nearly 4 billion pounds in terms of dressed


Recent and prospective changes in wheat and corn prices indicate
that wheat may be a cheaper feed for livestock than corn during the coming
summer. On May 15, the United States average price received by farmers for
corn was $1.21 per bushel compared with $1.13 for wheat. In early June,
July futures for corn were from 4 to 12 cents higher than those for wheat,
and September futures for wheat were only slightly higher than f.or corn.
The relationship which will prevail between corn ind wheat prices this summer,
of course, will depend to a considerable extent upon the outturn of the 1937
wheat crop and the prospects for corn production this summer. On the basis
of conditions about June 1, winter wheat production was estimated to be
above average and considerably larger than that of any year since 1931.
Prospects for spring what also are fairly favorable.

Even if corn crop prospects are favorable this summer and a fairly
large corn crop is harvested this year, large supplies of new cropoorn
will not be available for feeding until October or November. On the other
hand, wheat from the new crop will be available in July. Thus, during the
months of July, August and September at least, large supplies of wheat
probably will be available when stocks of corn on farms will be about the
smallest on record.


Ordinarily wheat sells for a substantially higher price per bushel than
corn in the Corn Belt States. The feeding value of a pound of wheat, ground
or crushed, is approximately the same as a pound of corn. A bushel of wheat
weighs 60 pounds, or 4 pounds more than a bushel of shelled corn; hence, if
wheat is the same price per bushel as corn, the larger number of pounds of
wheat per bushel usually will more than offset the cost of grinding~ or
crushing wheat.

As shown in the accompanying table, the average price of corn received
by farmers on May 15 was higher than, or about the same as, that for wheat
in 8 of the 12 North Central States. In Kansas the price of corn was 16
cents per bushel higher than the price of wheat, and in Nebraska and
Missouri 10 and 11 cents higher, respectively. If prices of corn continue
high in relation to wheat. prices, it seems probable that a considerable
quantity of wheat will be fed to hogs and other livestock during the late
summer and early fall, before the 1937 corn crop is harvested. Under such
conditions, wheat feeding probably will be greatest in the Western Corn
Belt, where supplies of old corn are very short, being almost nonexistent in
some areas.

Corn prices also are high in relation to prices of barley and oats.
Should this relationship continue during the summer as now seems likely,
the utilization of the new crop of barley and oats for livestock feeding
will be above average for that season of the year.

Price per bushel received by farmers for corn and wheat in the
United States and specified States, May 15, 1937

State Wheat :Corn : State : Wheat Corn

:Dollars Dollars :: Dollars Dollars
U.S. Minn. ....: 1.21 1.15
average ......: 1.18 1.21 ... 1.2 1.
Iowa ....: 1.23 1.23
Ohio ............ 1.25 1.21 Mo. ....: 1.26 1.37
Ind. ............ 1.21 1.21 N. Dak....: 1.18 l.-C
Ill. .......... : 1.20 1.24 : S. Dak....: 1.16 1.17
Mich, ...... ....: 1.21 : Nebr ...: 1.17 1.27
. .-s ............: 1.30 1.26 Kans. ....: 1.17 1.33



If crop conditions continue favorable, it seems probable that hog
slaughter during the period from June through Se member will be considerably
;,'..crl than that in the corrcs. c.anding period of last year. Although storage
stocks of hog products were still relatively large on June 1, a considerable
decrease in such stocks was reported from May 1 to June 1. The larger
storage stocks on hand at the beginning of June are likely to about offset
the decrease in h] : slaughter in the next 3 or 4 months as compared with a
year earlier. And consumer demand for moats probably will be stronger
during this period than during the summer months last year. It is expected,
therefore, that hog prices this summer will average higher than those of
last summer. An advance in prices during the summer to a level higher than
that reached in late May is likely, especially if prospects for corn
production are favorable.

In previous issues of this report it was stated that marketing of
fall pigs this year would be earlier than usual from some areas while in
other areas it was indicated that short supplies and high prices of corn
would cause many producers tc carry 1936 fall pigs on pasture and finish
them later on the new crop of small grains and to some extent on new crop
corn. The marked decrease in slaughter supplies of hogs during May indicates
that both of these developments have occurred.

Although no estimate can be made now of the number of fall pigs that
were marketed early and of the number that are being held for later finishing,
it seems probable that the number of such pigs which will be marketed this
summer is smaller thn the number on hand in early June of last year.

If corn crop prospects are favorable this summer the number of sows
retained for fall farrow probably will be larger than the number farro-':ing
last fall. This also will tend to reduce hog mark.-tin-3 this summer. Like-
wise, if crop pr.:.;.rts are favorable, spring pigs will not be marketed in
large volume during the late summer, as was the case last year when there
was a severe dr-uLht.

The official estimate of the 1937 spring pig crop will be released in
late June. The hog-corn price ratio has boen much below average since last
summer, and if producers reacted to this relationship between hog prices and
corn prices as they did in other years, the 1937 spring pig crop is smaller
than the spring crop of 1936. If corn production this year is about average
it seems probable that spring pigs raised this year will be marketed somewhat
later in the season than those raised last year, when corn supplies were
very short. Under these conditions the proportion of the 1937 spring pig
crop marketed before thu end of this year will be relatively small. It is
possible then, that the seasonal decline in h-g prices after next September
will be somewhat less than usual.


Ho slaughter maybe larger in last half of 1938

Should corn production this year be about average, some increase in the
1937 fall pig crop and a considerable increase in the 1938 spring pig crop
probably will occur. These increases in the number of pigs produced would be
reflected in materially larger slaughter supplies of hogs after the early
spring of 1938. But even with an 'avergo corn crop in 1937, it is expected
that hog slaughter throughout 1938 will be considerably loss than the average
of the 5-year period preceding the 1934 drcuFht, although somewhat larger than
the 1935-37 average.

Supplies of hogs and hog products, specified periods


S: Oct. Sept. : Oct.-Apr.
:Unit : Apr.:Mar. Apr. :Average:
S :1936 :1937 :1937 :1928-29:1934- :1935- :1935- :1936-
to : 35 36 : 36 :37
~: : : :1932-33:

1/ : thou- :
Inspected slaughter : sands :2,559
Live weight:
Average .........:pound 231
Total. ... ... ... 591
Dressed weight:
Av'r- ........... :pound :176 449
Yield of lard per
100 pounds live
.:i;ht of hogs.....:pound :13.1
Production of lard 77
Apparent consumption:
Pork,incl, lard : : 424
Lard ........ ..:. : 61
Exports 2::
Pork ............ : : 5
Lard ..............: : 10
Imports of :rk 2/ : : 3
Proportion of cows
in inspected
sl- 3/....... recent t 47.4

3,033 2,810 46,363

220 217 231
666 611 10,723

165 164
499 459

11.5 11.2
77 68



499 456 7,171
54 67 961


30,680 31,022 18,355 34,669







172 161
3,156 3,959

11.6 12.1 11.8 11.5
790 870 495 610

i,102 5,124 2,860 3,400
730 712 399 442

104 69
142 101
7 32

48.5 49.3 51.2 51.3 52.0 47.6 49.1

1/ .ur-. o of Animal Industry.
/ United States Department of Commerce. Pork includes bacon, hams and
shoulders and f..s i, canned and pickled pork. Lard includes neutral lard.
3/ Includes -ilts.


prices of hogs and hog products, specified periods

SOct.- Sept. : Oct.- May
: :Average:
:Unit :May :Apr. : May :1928-29:1934-:1935- 1935-:1936-
:1936 :1937 :1937 : to : 35 : 36 : 36 : 37
:1932-33: : :

Average price:

Seven markets ...: 1(
Chicago .........:
U.S. average price
received by farmers:
Prices of hog pro-
ducts, Chicago:
Loins, 8-10 lb. :
Hams,smoked, reg.:
No.1, 10-12 lb. :
No.1 dry cure,
6-8 Ib. ........
H.W. tubs ......: "
Composite wholesale
price of hog
products, New York "
Average price of
No. 3 Yellow corn, : c


lb. : 9.36 9.85 10.56 1/
: 9.58 9.97 10.73 6.99

S8.59 9.04 9.39 6.48

S 20.04 21.56 24.89 17.07

:25.25 23.50 24.34 20.31

:29.34 26.88 27.38 23.71

S 11.12 12.62 12.88 9.68

" :20.57


Chicago .........:per bush.: 63
Hog-corn price
ratio 2/ :
Chicago .......: bushel :15.2
North Central
States .......: :16.3
Proportion of pack-
ing sows in total
packer and :
purchases, seven
markets 3/........:percent : 7.0
Average weight at
seven markets .....: pound : 242

20.49 20.94 17.36

135 135 62

7.4 8.0 11.6

7.6 8.0 12.9

5.o 9.0 1/

227 232 1/

8.18 9.64 9.65 9.81
8.42 9.90 9.90 10.02

7.54 9.15 9.03 9.15

20.08 21.21 20.66 19.85

21.62 26.58 26.66 23.48

28.24 30.86 31.53 27.25

14.29 12.65 12.89 13.08

20.49 21.93 22.08 20.58

86 74

64 116

9.9 14.1 15.6

10.0 15.8 17.7


16.0 8.0 6.0

229 241 236 220

i Not available.
2.' Number of bushels of corn equivalent in value to 100 pounds of live hogs.
3,, Monthly figures computed from weekly averages.

- 0 -


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