U:'ITED .T.'.i iS. DEPARTMENT OF .'..FICULTURE
Bureau of Agricultural Economics
W V .in- ton
HS-14 December 18, 1937
THE H 0 G S IT U ATI 0 N
Hog prices were fairly steady in the first half of December, following a
very marked decline from mid-August through o'.:-.iber. In late November the
weekly average price of butcher hogs at Chicago was about $0 compared with $.-3
in mid-August. The chief reasons for this marked decline, according to the
Bureau of Agricultural Economics, were: (1) A relatively greater-than-
average seasonal increase in hog marketings;(2)an increasing weakness in the
consumer demand for meats and lard, and (3) a weak storage demand for hog
products, which apparently resulted from the prospects for larger hog marketing
and a lower level of consumer demand. Prices of light and medium weight hogs
recovered slightly in early December.
As indicated in the Bureau's annual hog outlook report, the total tonnage
of hogs marketed in the 1937-30 marketing year, which began October 1, is
expected to be about equal to that in 1936-37. In view of the prospects for a
weaker consumer demand for meats in 1933 than in 1937, it was stated in the out-
look report that the average price of hogs in 1937-33 probably would be lower
than in 1930-37. The declines in industrial activity and employment since the
outlook report was prepared in October increases the probability that prices
will average lower in the current marketing year than in 1936-37.
Although the seasonal reduction in hog marketings in early 1933
probably will be loss than average, a stronger storage demand for hog
products may develop during that period, Some seasonal advance in
hog prices, therefore, may occur in the early months of 193l, unless
r-. ter weakness develops in consumer dem.nd tha- is now expected.
But since hog marketing in thi, last half of the 1937-3 marketing
year are ~::pected to be consid..rably larger than a year earlier, ~,,"
prices are expected to average lower next spring and summer than in
the saiue cpriod of 1937.
.. supplies this year generally are large in relation to the
nuImber of livestock on farms. Thes. large feed supplies, t- -thcr with
the relatively low -food price s, probably will result in a materially
larger pig crop in the spring of 133 than a year earlier. The ratio
of hog prices to corn pric-s has bcon considerably above aver: since
Se pt; :nemb r.
The Decorb r 1 PiFl Crop Re, ort, givi...- estimates
of the numLbrs of sows farrovwd and pigs saved in
the fa1l season of 1937, v:ill be released
DceL:.b r 23, 1937.
REVIEW OF RECENT DEV7L:C'[ "T-'S
D:.;Fi i ,.- 1Hogr prices in the 1936-37 marketing
year, which ended September 30, 1S37, averaged
higher than in any year since 1926-27. Inspected
hog slaughter in 1936-37 was about 10 percent
larger than in either of the 2 preceding years,
but was about 25 percent smaller than the average
of the 10 years prior to 1934-35. The higher
average price for hogs in 1936-37 than in 1935-36
was chiefly the result of the improvement in
consumer demand for meats. All of the increase
in hog slaughter in 1936-37 over that of a year
earlier was in the first 7 months of the year,
October 1936 through April 1937. Inspected hog
slaughter from May through September 1937 was
only slightly larger than the small slaughter of
the summer of 1935, and the May-September slaughter
of 1937 was the second smallest for the period
since 1902. The very small sumner slaughter in
1937 was largely a reflection of the greatly
reduced feed supplies resulting from the 1936 drought.
Hlog prices drog sharply from August through November
Hog prices recovered slightly in early December, after declining to
the lowest level since early 1935 during late I1ovember. The advance in early
December, however, was confined to light and medium weight hogs, as prices of
heavy weight hogs declined further during this period. From mid-August to
late November the weekly average of butcher hogs at Chicago declined from
about $13 to about $8 This decline was one of the greatest on record
for periods of similar length. Ordinarily hog prices decline somewhat in
the fall months as marketing of spring pigs increase, but this year the
decline was much greater than average.
Large, seasonal increase in hog slaughter since August
The chief reasons for the marked decline in hog prices wero:(l) The
relatively greater-than-average seasonal increase in hog slaughter supplies;
(2) an increasing weakness in consumer demand for hog products; and
(3) a weak storage demand for hog products, which apparently resulted from
the prospects for larger hog marketing and a lower level of consumer demand.
Despite the fact that hog slaughter has continued smaller than a year earlier,
the increase from the very low level in mid-August through November was
relatively largo. Inspected hog slaughter in November, totaling 3,295,000
head, was more than double that of Auyu.t, whereas over a period of years the
average increase from August through November has been about 45 percent. In
both October and November inspected hog slaughter was more than 20 percent
smaller than that of a year earlier.
Weakness in consumer demand since last summer
In recent months industrial activity has been rather sharply reduced
and employment has decreased. As a result there has b en some weakness
in consumer demand for meats. In addition, the demand for lard also has
been weakened by the much larger sup ly of cottcnsced oil for 1937-30
than for 1936-37.
Storage demand for hog products unfavorable
Since periods of time, varying roughly from 1 to 3 months, are
required for processing and curing hog products, prices of hogs and hog
products are affected not only by the current .i'.ly and consumer demand
but also by prospective future conditions of supply and consumer demand.
In view- of the larger feed supplies this year, it is expected that the
total tonnage of hogs l1: 1'.tered in 1938 will exceed that of 1937.
It appears probable that consumer demand for meats in most of 19 w- :ill be
less favorable than in 1937. These prospects for larger supplies of 3
and weaker consumer demand, and hence lower prices, in 15_'3 have been
reflected in the storage operations of packers. Storage stocks of Iog
products decreased steadily from April thr:. October, and at the
beginning of November storage stocks of pork and lard -ere near record
low levels. The increase in such stocks during Novrmber was relatively
small, ': ig only about one-third as large as the increase, in November
last year. Consequently the movement of ho- products iidto consumption
channels has boen large in relation to the number of hogE marketed, and
the recent increase in slaughter supplies of hogs has beao reflected
strongly in prices of hogs and hog products.
Storage holdings of pork and lard on Deccmber 1, average 1-30-34,
annual 1935-37, and Iovci..ber 1, 1 37
Dec. 1, Dec. 1,. Iov. i, Dec. 1,
Item : lvra : 13) 13 1.37 1 ". i/
: I : : :--
: 1,00 1,000 1,0;C 1,0 1,00
: fundss pounds r pounds _?ou nds .: :nds
frozen ................ ..', 776 36,0468 144!. 77 7 i ,. ,
:" salt, cured and
in ;**... of cure...: 9,57 3, 43,710 3,05 3. 1 7
Pick led, cureid n.d in :
rccess olf cure :...: 313,1 136,177 275,' 1' ,933 202, C-7
Total ............ : ,, ,40 2.6,414 5.-.
Lard .................. .. : 6, 215
Hog situation in recent months much different from year earlier
The hog situation in the fall months of 1937 has been in marked
contrast to that of the fall of 1936. The seasonal decline in hog prices
last fall, that is, from August through November 1936, was small, amounting
to only about 50 cents per 100 pounds, despite tha oct that the seasonal
increase in hog marketing during this period was fairly large. The
strength in hog prices in the fall of 1936 apparently resulted from the
rather strong storage demand for hog products which developed at that time.
The 1936 corn crop was unusually small because of drought, and in the fall
of 1936 it was generally expected that the slaughter of hogs in the spring
and summer of 1937 would be very small. Also, at that time prospects for
demand conditions were generally favorable. Industrial activity, employment
and incomes of consumers were increasing. Consequently, in the fall of
1936 the outlook was for rising prices of hogs and hog products during the
spring and summer of 1937.
These prospects resulted in a larger than usual increase in storage
stocks of pork and lard from October 1 to March 1. The proportion of the
total volume of winter hog production going into storage in 1936-37 was
the largest on record. At the beginning of March 1937 the increase in
storage stocks of hog products over a year earlier was roughly equivalent
to the products obtainable from about 2,800,000 hogs of average market
Beginning about mid-May 1937, slaughter supplies of hogs were reduced
sharply and hog prices advanced. This decrease in supplies continued until
about mid-August. The rise in prices of butcher hogs from late April to
mid-August was about $3.25 per 100 pounds. During the summer when hog
supplies were very small, stocks of pork and lard were greatly reduced, and
by the end of October they were about the smallest of record.
Prices of hog products decline since August
Wholesale prices for fresh pork, cured pork and lard declined during
November, with prices of fresh pork recovering slightly in early December.
As usual for this season, the decline in prices since August has beeh much
more pronounced for fresh pork than for cured pork. About mid-August the
weekly average price of light loins, 8 to 10 pounds, at Chicago, was
$31.20 per 100 pounds, but by late November it was down to about $16.25.
The weekly average price of hams, smoked regular, No. 1, 12 to 14 pounds,
at Chicago, declined from $27.50 per 100 pounds in mid-August to about
$21.75 in late November. In early August the weekly average wholesale
price of refined lard at Chicago was $13.75, but by late November it was
only about $10.
The drop in prices of -?h; products reflects the increase in supplies
of hog products moving into consumption channels, and the weakening of
consumer demand for hog products. As already indicated, lard prices also
have been affected by the greatly increased supplies of cottonseed oil
from this year's record cotton crop.
IHoc-corn price ratio more favorable for hog Lroducts_
With corn production and the total production of all feed grains much
larger this year than last, t he shift in prices of corn to a now crop
basis in the past 2 months has been accompanied by a decline of more than
50 percent. The weekly average price of No. 3 Yellow corn at Chicago in
late November was only about 53 cents per bushel, compared with the average
for September of ^1.06. Since the decline in corn prices was relatively
greater than the drop in hog prices, the hog-corn price ratio increased
from about 9 in mid-summer to about 16 in November. The average ratio over
a long period of years was about 11.4.
The more favorable relationship of hog prices to corn prices has been
r.'Ltly responsible for average weights of hogs in recent months being, much
heavier than a year earlier. The heavier average weights also reflect the
comparatively large markutings of hogs from t he 1936 fall pig crop which
wore held during the spring and summer on pasture and finished later on
the now crops of feed grains. Partly because of the larger proportion of
heavy weight hogs in market s.u' ly than a year earlier and partly because
of the relatively weak demand for lard, prices of heavy weight hogs have
declined more in recent weeks thaoi prices of other kinds.
Lard exports increase in October
Lard exports in October, totaling nearly 19 million p:ourdi were the
largest for any month since November 1934 and were about twice as l1-rc: as
in E_ tfi.er. A large part of the increase as compared with a month
earlier was in shipments to the United Kingdom. In view of the relatively
small stocks of lard now on hand and the continued low level of lard
ro,.icti,:nr, it does not :.; -.r likely that exports during the current
winter season, will continue in as large volume as in October. For the
entire marketing year, 1937-38, however, lard exports may exceed those of
19-''-37 chiefly because of the larger supplies of cottonseed oil available
for domestic ucs. L'.:.l'ts of pork in October totaled about, ,000 pounds,
lar-7 r. than in September and also l:Ia_-r than in October last year.
Imports of pork in Octob.r amounted to about 6 million pounds, or ab,-.t
the same as in September.
BAClhO.'-.DI.- In the hog outlook report for 1938
released by the Bureau in early Noverber, the
following indications with respect to prices and
sipplics of hogs next year wore given:
(1) The number of hogs slaughtered in the
1937-30 marketing year, which began October 1,
probably will be somewhat smaller than in 1936-37.
The decrease in numbers slaughtered, however, w ill
be largely offset by an increase in average weights.
Hence, total supplies of hog products in the current
marketing year probably will be about as large as a
(2) Donestic demand for hog products in the
1937-38 marketing year probably will bc less favor-
able than in 1936-37. Hog prices in 1937-38, there-
fore, are expected to average lower than in 1936-37.
(3) Seasonal changes in hog marketing and
in hog prices in 1937-38 probably will be materially
different from those of 1936-37. It is expected
that supplies in the first 3 months of the marketing
year will represent a relatively small proportion of
the total for the first half of the year and of the
total for the entire year. Hog marketing in the
last half of the year will be fairly large in
relation to those of the first half of the year. Hog
prices in the summer months of 1938 probably will
advance much less than they did in the summer of 1937.
(4) The number of pigs raised in 1938 will be
considerably larger than in 1937. In the Western Corn
Belt, where hog numbers have been sharply reduced since
1933, the expansion in hog production next year will be
only moderate, for corn production in the Corn Belt
States west of the Missouri River was curtailed by
The further declines in industrial activity and employment since the
outlook report was prepared in October strengthens the indication that
the domestic demand for hog products in the 1937-38 marketing year will be
less favorable than that of 1933-37. In October hog prices averaged about
50 cents hichi.-r than in October 1936, but in November they averaged about
$1 lower than a year earlier. In the 1936-37 marketing year hog prices
were at the lowest level of the year in October and Novc.'.bWr. With present
prospects for larger slaughter supplies of hogs in the last half of
1937-38 than a year earlier, it now appears fairly certain that the
average price of hogs for the current marketing year will be lower than in
the previous year.
As indicated earlier the recent sharp decline in hog prices reflects
not only the increased slau-hter of hogs and weakened consumer demand but
also a very weak storage demand. If consumer demand and business activity
generally show signs of stability in the next few months, it is probable
that there will be some improvement in the -storage demand for hog products,
especially in view of present small stocks. Although the seasonal reduction
in hog marketings durir.; the late winter is expected to be less than
average, it probably will be sufficient together with the improvement in
storage demand to cause come advance in hog prices from present levels
during thu first quarter of 1938.
With prospects for larger slaughter supplies of hogs next sura~er
than a year e earlier it would be expected, even with no change in demand
conditions, that prices during the period would be lower than last summer.
If demand conditions are less favorable, hog prices probably will
average considerably lower than in the summer of 1937, when they were
Despite the probability that hog prices during the remainder of the
1937-38 marketing year will average lower than a year earlier, t he
relation of hog prices to corn prices probably will continue favorable
for the feeding of corn to hogs. Feed supplies generally are large
in relation to the number of livestock on farms, and these large feed
supplies along with the relatively low feed prices are likely to result
in a pig crop in the spring of 1933 considerably larg-r than a year
Supplies of hogs andL hog products, specified periods
O: ct. Sent.
: Unit : Oct.:Soeptl.:Oct. :1.92 -'9:
: : 1936:1937 :1937 : to
: : : :1932-33:
36 : 37
Hog slaughter under
Number slaughtered I/
Live weight: :
Average ......... foundd :
3,492 2,033 2,711
46,303 30,630 31,022 34,142
231 220 232 221
Total ............:mil.lb.: 742
Average ...........: pound
Yield'of lard per 100 :
pounds of live weight :
of hogs ..............: pound
Production of lard ....:mil.lb.:
472 611 10,723 6,742 7,11 7,533
9.2 9.7 15.2 11.6 12.1 10.9
81 44 59 1,630 750 870 833
Pork, incl. lard 2/mil41b.: 5149
Lard .............: : 77
Pork .............: 4
Lard ......... .....: 11
Imports of pork _/.......: :
Proportion of sows in
inspected slaughter i'...:percent:
465 404 7,171 5,102 5,124 5,002
79 73 961 730 712 757
3 6 6
211 104 69 59
657 142 101 107
6 7 32 72
1/ Bureau of Animal Industry.
2/ Represents apparent disappearance of federally inspected pork plus
unrendered hog fats.
3/ United States Department of Cominerre. Pork includes bacon, hams, and shoulders,
and fresh, canned and pickled pork. Lard includes neutral lard.
_/ Includes gilts.
51.2 51.3 52.0
Average price: :per 100:
Seven markets .......:pounds :
Chicago .............: :
U. S. average price
received by farmers...:
Prices of hog products,:
Loins, 8-10 Ib. ..... :
Hams, smoked reg.
No. 1, 10-12 lb. ....
Bacon, smoked, No. 1 :
dry cured, 6-8 lb. :
H. W. tubs .........: "
price of hog products,:
Now York .............
8.74 9.78 8.25
17.26 21.68 18.71
22.31 25.75 23.62
26.84 32.50 29.38
12.66 12.00 11.36
20.04 22.63 20.53
9. 74 9.11
6.4' 9.15 9.66 8.96 9.02
17.07 21.21 22.29 18.46 20.20
20.31 26.58 24.65 23.50 24.63
23.71 30.86 20.58 27.09 30.94
9.68 188.8.131.52-12.54 11.69
17.36 21.93 21.40 20.47 21.58
Average price of No. 3 : cents :
Yellow corn,Chicago...:per lb.: 105
Hog-corn price ratio 2/:
Chicago ............:bushel : 9.1 15.2 16.2
North Central States: 9.2 19.3 19.0
Proportion of packing
sows in total packer
and shi *:1 purchases,:
seven markets 3/.....:percent: 6.0 16.0 8.0
Average :.1 ht at seven:
markets ............. :pound : 203 234 231
53 62 74 115 106 60
11.6 14.1 9.2 9.0 15.7
12.9 15.8 9.5 9.3 19.2
1/ 16.0 15.0 9.0 12.0
1/ 241 231 210 232
1/ Not available.
2/ Number of bushels of corn jC ivalent in value to 1i(,". i,'.ds of live h!c,-:.
3/ Monthly figures computed from weekly ,'.' :.
UNIVERSITY OF FLORIDA
I- i Ull I 1111 1 1111 11111 11111111111 11III 1
3 1262 08861 7575
Prices of hogs and hog products, specified periods
S: Oct.-Sept. :Oct. Nov.*
SNov. : Oct.: Nov.192C-29:1935-:1936-:1936-:1937-
Unit 1936 :1937 :1937: to 36 : 37 :37 : 38
S: : :1932-33: : : :