UIIITED STATES DEPm:T:IElf OF AGRICULTURE
Bureau of Agricultural Economics
HS-19 May 18, 1938
THE HOG SIT UAT IO N
-- ',-.- T Sunmary
Little further weakness in hog prices is expected during the early
summer in view of the probable small seasonal increase in hog marketing,
the small storage stocks of pork and lard now on hand, and the drop in
prices that has occurred since early March, With a seasonal reduction in
hog slaughter in late summer, the Bureau of Agricultural Economics says
some advance, in prices probably will occur. But this rise in prices will
be limited by the continued weak consumer demand for meats.
Sl-..,:htcr supplies of hogs during the sumanr season (May through
September) will be considerably larger than those cf last summer. This
increase, however, wvill be offset to a considerable extent by the decrease
in stocks of pork and lard now in storage compared with a year earlier.
The 1938 spring pig crop probably was somewhat larger than that of
1937* Supplies of feed have been abundant during the past winter, and the
hog-corn price ratio has been very favorable for an expansion in hog
production. I' crop crniiticns continue favorable, a considerable increase
in the 1938 fall pit crop over that of last year is expected. Larger pig
crops in 1938 will mean larger marketir.._- of hogs in the year beginning
next October than in the present marketing year, which ends September 30*
Hog prices declined almost steadily from early M-.rch to early May, and
prices in the first half of May were lower than at any time since January.
The drop in prices during the past 2 months, miountir.r: to about $1.50 per
100 pounds, apparently resulted from further weakness in consumer d-r~-.d for
meats, since r.irk.tings decreased during the period. Prices strengthened
slightly during the second week of May.
REVIEW OF RECENT DEVELOPMENTS
B:.CIlGFCULND.- Hog prices last summnr reached the
highest level in more than a decade as a result of
very short supplies and fairly favorable demand
conditions. During the fall and. early winter, hog
rarketings increased and consumer and storage d.m.nrnd
for hog products weakened. A marked decline in hog
prices resulted. A moderate improvement in prices
occurred front latc January to early March, with the
average weekly price of hc:-, at Chicago reaching
about $9.40. At the winter low point in mid-_-,c..ib.r
1937 the Chicago weekly average was about $7.75. In
nid-August 1937, however, before the decline in prices
began, the weekly aver,:.ej was about $12.40.
Hog prices decline front mid-March to early May
Despite the continued decrease in sl-lU:11ter supplies of hours during
March and April, hog prices declined from mid-March thr-u.-i early May.
The average price of hogs at Chicago for the first week of :.'y, of $7. 0
per 100 pounds, was the lowest weekly average at that market since -id-
January, and it was nearly $1.50 lower than in tho first vwok of March.
In early May last year, the Chicago weekly avera-e was slightly more than
$10. Prices str.-ncthened slightly during the second week of May.
In the early months of the present mark ti.; year the spread between
prices of light and heavy hogs was unusuall:- wide. Duri.;g Jnr.:ary, for
example, prices of light h--s were more than "i hi'-h.r than pi-icos cf
heavy ho;s, whereas the usual spread for that time of year is about 5C' cents.
T :e rise in prices from mid-January to early March was sormewhat greater for
heavy hogs than for light h- s, and the spread vaas reduced to a cro nearly
normal fi :urL. The decline in prices since early March has been about the
saie for the several :.-i :.t groups. Consequently, in early May when t he
v. c-r,-o price of all hogs was about the same as in Jiu:.iy,, prices :f li-.ht
hogs were somewhat lower and prices of heavy "3 were souowhat h: -h.r
than in January.
Prices per 100 pounds of hogs at Chicagc, January and
specified weeks, 193.
:: Light : Medium : Heavy
: Average : weight : weight : weight
month and eek price 180-200 : 200-220 : 290-350
1/ pounds : pounds :pounds
:Dollars : Dollars : Dollars : Dollars
Month of Jan. ....: 7.91 8.52 8.40 7.34
Week ended Jan. 22 : 783 8.55 8.39 7.22
Week ended Mar. 12 9.39 9.62 9.66 9.32
-Week ended May 7 7.90 8.10 8.10 7.76
l/ Packer and shipper purchases.
Hog slaughter further reduced i Apil
c.j:s slaughtered under Federal inspection totaled 2,462,000 head in
April, about 150,000 fewer than in March and nearly 350,000 head fewer
than in April a year earlier. Inspected slaughter in April this year was the
second smallest for the month since 1914, although it exceeded that of
April 1935 by a considerable margin. ;.v...rm; weights of hogs marketed
continued heavy. The averi: weight at the seven leading markets in April
was about the same as for the earlier months of 1938. With the proportion
of packing sows in the market supplies showing little or no increase and
weights continuing heavy it appears that narketings of 1937 fall pigs had
not reached large proportions by the end of April.
May 1 stocks of pork and lard much smaller than year earlier
Storage stocks of pork on May 1 totaled only 500 million pounds,
the second smallest holdings on record for that date, and 256 million
pounds under those of May 1 last year. Stocks of lard also were much smaller
than those of a year earlier, The decrease in storage holdings of pork and
lard combined on May 1 this year, compared with last, amounted to about
343 million pounds. This decrease in the quantity of hog products in
storage is roughly equivalent to the products obtainable fr'f.. about
2,100,000 hogs of avcr-ge market weight.
Storage holdings of pork and lard on the first of the month,
: 5-year average :373
:1929-30 to 1933-34: 1936-37 1
SPork Lard Pork Lard Pork : Lard
:Mil.lb. Mil.lb. Mil.lb. Mil.1b. Mil.lb. :.il.lb,
Oct. .... : 530 109 362 102 283 73
Jan. ..... : 565 72 667 146 399 54
Apr. ..... : 731 105 756 217 544 121
May ..... : 733 113 756 209 j/500 1/122
Hog-corn price ratio reduced in March and April
Corn prices were fairly steady during April, and with the drop in
hog prices during the month the ratio between prices of hogs and corn was
reduced. In late April, the hog-corn price ratio, based on Chicago prices,
was 13.8 compared with 14.5 in early April and 16.1 in early March. The
long-time average ratio between Chicago prices of hogs and corn is about
11.4. In late April last year the ratio of about 7.4 was considerably
less than average and much below that of the present year,
The ratio between ho.) prices and corn prices has been above avrage
since last September, whereas in the corresponding period a year earlier
it was considerably below average. The higher ratio in 1937-38 than in
1936-37 reflects the much lower prices of corn, since hog prices also have
been lower than a year earlier. The higher ho--corn price ratio tnd the
more plentiful feed supplies largely account for t he heavier w- ights of
hogs in the past 6 months than a year earlier.
Prices of hoj.roducts icclin. in Alril
Wholesale prices of most cuts of both fresh and cured ;.ork :,' lakened
duri!., April, while lard prices held about steady. Prices of fresh pork
in late April were considerably higher than in January, when hog prices
were about the same as in late April, but prices of cured ;ork in late
A:ril were somewhat lower than in January. Prices of all hog products in
recent months have boon somewhat lower than those of a yoar earlier.
March exports of pork nud lard larger than year Curlier
Exports of lard in March i7orc about the sa.;:e as in February, but
exports of about 6.9 million pounds of pork exceeded those of February by
2 million pounds and wore largest for any month in nearly 2 years. In the
first half of the present hog marketing year, beginingn last October, total
exports of apork anountei to about 42 million pounds, nearly 14' million
pounds larger than those of a year .earlier. Lard exports of about 112
million pounds in the first half of 1937-33, wore the largest for tnis
period since 1934-35. .,.:orts of lard in the first half of present year
were slightly lar. r than the total exports during L he entire 1936-37
mark et i ni year.
Imports of perk increase in March
Pork imports in 'March were about twice o.s large as in Fbn. ,
but they vvre slightly smaller than i- March last year. The rlarch total
of nearly 7 million ,-'.;-. c was Liostly bacon and hams.
The prospects for hog pr-ce and .urp ios for the remainder of the
1937-38 marketing year, which ends Sptoember 30, have not changed greatly
during the past month. The following indications vith respect to
prospective supplies and prices of hogs w.,ere given in the April issue of
(1) Slaughter supplies of hcgs during the remainder of
the 1937-33 n,.rketi:_ y-ar 1-ill bo considerably larger
than th;o of a year earli ,r. Thu increase in supplies
over last sasCon,hC. ver, w':ill bo partly offset by the
reduction ir storage stocLs from last year's levels.
(2) After declining seasonally in the late spring and
early surnmar, some recovery in hog prices is expected
in late suna.r, when marketings of hogs are reduced
(3) The recovery in prices in late sumner will be
limited by the continued .woak ccnsumcr demoCnd for
meats. The rise probably vill be much less than that
which occurred in July *_ni early .A.-u:t last year.
Seasonal increase in h
Although so.ie seasonal increase in hog nrirktings nay occur
during the next several weeks as the novorment of 1937 fall pigs -':t
underway in large volume, the increase probably will net be large. Last
year marketings were reduced sharply in LIzyI and continued snall in June -
contrary to the usual seasonal tendency. This occurred because a large
number of 1936 '--1' r.pi -, were uirketod before I:.;: anda after Septeuber as
a result of the shortage and high prices of feed. This year, with feed
supplies much larger and feed prices considerably lower, the market
movement of frll. pigs probably nwill occur mostly in late spring and
suir'or, with sone tcndcncy for such hogs to be markcted later than usual
because of f .li: !_ to heavy weights. In view of the difference in the
tine of marketingg fall pi -, between this year and last year, market
supplies of 1ilos in Lay and June could be nuch lar -:.r than those of a
year earlier, without Leir.; nuch l-rgor than in the mact month. It is
possible, however, that narketings in Jun;e .:ill be considerably larger
than in April or May.
Hog narketings to beo reduced in late cu.urer
Hoe mnaketin>gs during July, August and SoptLodor usually are the
smallest for any quarter of the year. A relatively largo percentage of
the marketing in this period arc packing sows. Alth-u '. supplies duri.-
the July Sorter-bur period this year are expected to be considerably
lariecr thsr thi very sr:all supplies of a year earlier, the increase over
a year earlier will be liLd.tcd to so'-e extent by tie lar-e number of so7ws
rncd rilts which vill be retained fcr ifarrow if feed crop conditions
contin ue favorable.
In the first 7 months of thi currc+nt ho mC.-rk tin g year, bc-i::.in-
last Octobcr, inspr-oto h ul-:l':'hti~ to': l- 9 abc.t 2?' :illicn head. In
o.-,i ir ju::u cf t'hic r port it w,' in-ic.c .id that slfu 'htr for the
n-..-c r probably y v:ouTl total! a ct ^.' .illic n ;. .al. This ewld nean
ta .i 'tr sup ly for t'e rol.i nii _. l on ofth h te o.rktin:; I car, to
th ..t ol S :tcr.ber, 'i' :-bout 12 ::dllion h:ad, or aboit ..1llicin head
Ic-. i. 1hit. of tL. cCrreos ondin p,~ri d. I st y:,.r, It ct :'1":ears
r1. K..... thy. :.'r.y tctal uf insect cd slaun her :'.l c 'tou as
l.,. s in'lic-'.co carliur. The. retention of a large:, -.n.Dr of sows
f' :.'r', hb'cv- r, i..arht' result in a. s:allor in.rc.as- in
a.' < cr ruip lics this sutr.nor than the : nre indicatL .
Hog price changes for the rest of 1937-33
The probable increase in hog marketing this summer over those of
a year earlier will be partly offset by the decrease in storage stocks of.
pork and lard now on hand compared with a year-ago. As indicated in the
preceding paragraph the increase in inspected hog slaughter in the summer
season (May September) over a year earlier may be about 2.6 million head.
But at the beginning of May this year the decrease in storage stocks of
pork and lard from a year earlier was roughly equivalent to out
2.1 million hogs. In view of the drop in prices that has occurred since
early March and the probability that the seasonal increase in hog
marketing in the early summer will not be large, it is expected that any
further weakness in hog prices in this period will be only moderate.
However, if-hog marketing in June should be considerably larger than in
April or May, hog prices might drop below the levol of early May.
Since some seasonal reduction in hog marketing is expected after
June, a seasonal advance in hog prices probably will occur in the late
summer. This advance, however, will bc limited by the continued cak
consumer demand for meats. It is doubtful if prices in the late summer
will reach as high a level as that reached in early March.
Large_ sprig and'fall pig crops exocted this year
On the basis of breeding intentions oeportbd aboit December 1, it
was indicated in the December 1937 pig crop report that the number of
sows to farrow in the spring of 1938 would be about 5 percent greater than
the number farrowing in the spring of 1937. The hog-corn price ratio
in the past 6 months has been rather favorable for expanding hog production
and feed supplies generally have been plentiful. Reports from producing
areas'indicate that there was a strong demand on the part of farmers for bred
sows throughout the winter. Receipts of p_..ckinr so~:s at the seven leading
markets during the win-der have been considerably smallee than those of a
year earlier. Thus, it is probable that the number of sows farrowing this
spring was at least 5 percent greater than the number farrowing last spring.
The carry-over of old corn into the .1938-39 season will be
relatively large, and if -rowirin- conditions continue favorable, corn
production this year will be near average. In view of the prospects for
relatively large feed supplies, the present highor-than-avcrago hog-corn
price ratio, and the current low level of hog production in many areas,
the 1938 fall pig crop probably will be considerably larger than that of
1937, Larger spring and fall pig crops in 1938 than in 1937 will Lean
that supplies of h..;: for market in the coming marketing year, beginning
next October, will be l'r'cr than in the present year, 1937-38.
Prices of hogs and hog products, specified periods
SOct.-Sept. : Oct.-Apr.
S : :Average:
t :Apr. : Mar.:Apr. :1928-29:1935-:1936-:1936-:1937-
S:1937 :1938 :1938 : to : 36 : 37 : 37 : 38
: : : :1932-33:
Average price: :per 100:
Seven markets ....:pounds : 9.85
Chicago .........: do. : 9.97
U. S. average price :
received by farmers : do. : 9.04
Prices of hog
Loins, 8-10 lb. :do.
reg.No.1,10-12 Ib: do.
dry cured,6-8 lb.: do.
H. W. tubs ......: do.
6.48 9.15 9.66 9.11 8.15
17.07 21.21 22.29 19.13 18.37
20.31 26.58 24.65 23.36 23.70
23.71 30.86 28.58 27.23 28.11
9.68 12.65 13.13 13.11 10.37
'..:-er-e price of No.3:Cents
Yellow corn,Chicago :per lb.: 135
Chicago ......... :Bushel : 7.4
States ..........: do. : 7.6
Proportion of p-.c-in:
sows in total packer:
and shipper purchases
seven markets 3/...:Percent: 5.0
".'.-r: weight at
seven markets ......: Pound : 227
59 62 74 115 113 58
11.6 14.1 9.2 8.8 14.8
12.9 15.8 9.5 9.0 17.6
1/ 16.0 15.0 6.0 6.0
243 242 1/ 241 231 218 237
1/ Not available.
2/ Number of bushels of corn equivalent In value to 1.' pounds of live hbes.
3/ Monthly figures computed from weekly averages.
Supplies of hogs and hog products, specified periods
: : : : :Average:
:Unit : Mar.: Feb.: Mar.:1928-29: 1935-: 1936-: 1936-:1937-
S: 1937: 1938: 1938: to :: 36 : 37 :37 : 38
S: : :1932-33:
Hog slaughter under :
Number : Thou- :
slaughtered 1/ : sands :3,033
Average ......: Pound
Average ......: Pound
Yield of lard per :
100 pounds live :
weight of hogs...: Pound
Production of lard:Mil.lb,:
2,833 2,610 46,363 31,022 34,142 21,859 19,608
228 228 231
647 594 10,723
12.1 10.9 11.5 12.1
870 833 541 543
Lard ....... ....:
Imports of pork 3/ : do.
419 464 7,171 5,124 5,601
49 57 961 712 756
211 69 59
657 101 107
8 3 7 6 32 72 33 30
Proportion of sows in
inspected : :
.slaughter 4/ ......:Percent: 48.5
45.9 47.0 51.2
51.1 49.1 47.2
i/ Bureau of Animal Industry.
2/ Represents apparent disappearance of federally inspected pork plus unrcndorod
3/ United States Department of Commerce. Pork includes Bacon, hams and
shoulders, and fresh, canned, and pickled pork. Lard includes neutral lard.
4/ Includes gilts.
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