Large hog kills in August including a record 1.958-million-head slaughter in the third week, and another record of 2.011 million head in the fourth week, point to lower hog prices ahead, says the University of Missouri’s Ron Plain.
"Combined slaughter in those two weeks in August are 8% above the same two weeks last year," he says. "USDA’s June pig report implied that slaughter would be up 1-3% at this time of the year."
Normal seasonal patterns call for daily hog slaughter to average 13% higher in November than in August, says the agricultural economist. "A 13% increase on that third week’s kill would give us a week with 2.212 million hogs slaughtered. That is close enough to slaughter capacity to make one worry about live hog prices in the single digits."
Besides rising hog slaughter numbers, producers have several other reasons to be concerned about prices trending downward. Pork stocks in cold storage were up 40% on the last day of July. Pork exports dipped 4.9% during the first half of 2002, says Plain, while pork imports shot up 16.7% over a similar period in 2001. So far in 2002, the average dressed weight of barrows and gilts has been over 1.7 lb. heavier than for the same period last year. Live hog imports are also up, competing meat supplies are up and the economy is soft, says Plain.
Moreover, if weekly hog slaughter continues to run 4-5% above last year, "live prices in the single digits are a very real possibility," he suggests.