So what is causing the current shortfall in numbers?  Before we answer that, let’s consider the magnitude of the shortfall.  Figure 1 shows weekly federally-inspected slaughter.  The red line is my forecast of weekly slaughter numbers based on the September Hogs and Pigs report.  Note that it is far below the level of last year, something we all expected.  But actual slaughter (the green line) is far lower than even those forecasts.  In fact, slaughter since Sept. 1has been 6.2% lower than last year and 2.9% lower than the forecast levels.  That 2.9% is 520,000 fewer hogs than I had expected.

weekly hog slaughter

Why is this happening?  My original idea was that hot weather in August and stretching a very short corn crop over 14 months (the normal 12 plus one month due to last year’s early harvest and one month due to this year’s late harvest) had caused hogs to slow down and thus reduce slaughter.  And weights from mid-July forward (see Figure 2) bear that out.  They didn’t go down but they didn’t go up as they normally do.  See the black dashed line in Figure 2.  It is the average for the past five years – what I would say is probably normal.  

slaughter weights

But look at what has happened since USDA market reporters returned to work!  The first of those two observations represents just one day but last week’s observation is for a whole week.  The 208.8 for both of those periods represents a return to rapid growth rates as cool weather and fresh corn work their magic.

So will more hogs come to town soon?  Likely – when prices begin to fall.  Why get in a hurry now if one earns 90 cents per pound – and maybe more – for another week’s growth?  But if price begin to fall, I suspect slaughter will rise.

I’m not completely confident that my hypothesis will be correct since the magnitude of the shortfalls is so large.    But I still think it is the most plausible explanation other than “The USDA missed it.”  Both are likely true to some degree.  The more legitimate of the two will be determined by hog numbers over the next few weeks.