does not appear that packers are choosing to share their margins with producers but are continuing to lower their bids. The model is now projecting that the component on the 1-23-15 kill will drop between -0.65 and -0.95. That projection may change when the final Purchase Index comes out Monday morning.

The kill last week was +4.51% higher than the same week last year. This suggests that there has been significantly more expansion of the nations hog herd than estimated on the last H&P Report. I suppose this should not come as a surprise. Cheaper feed is almost always followed by more hogs. Besides that, producers may have learned how to live with the PED virus problem and are now getting better farrowings.

With the global economic challenges we are facing and the high dollar reducing the purchasing power of other nations, the good old U.S. of A. may have to consume more of the pork we are producing. Consumers may want to do that at a lower price level.

Best wishes,

dhm