We feel that the diverse geographical area that the National Cost price represents potentially helps to minimize daily and long term price fluctuations. The current U.S. market prices are the Indiana and Illinois liveweight prices. National Cost reports lean carcass hog prices. National Cost represents prices packers paid in the Eastern Corn Belt, Western Corn Belt, and Mid-South Region. The National Cost derives the average daily base cost from surveying the total procurement costs, and actual number of hogs bought by each processor.
Processors voluntarily submit that data.
The report is volume driven and it provides one average carcass weight and weighted base slaughter cost. The USDA considers this price series their best due to less manipulation of prices reported by processors as compared to Eastern Corn Belt and Western Corn Belt lean price reports. The total procurement costs and number of slaughter hogs as reported by the processors are subject to audit by government. They are decreasing volumes of negotiated hog sales in these spot markets. These reports have been subject to poor price reporting.