Hog Slaughter Continues To Expand

Federally inspected hog slaughter continues to expand past last year’s highs and already has set a new record annual high.

The new record was estimated at 2.532 million just two weeks ago.  Preliminary USDA estimated slaughter numbers indicate a smaller number this week, even after falling away last week.

The official slaughter peak of two weeks ago will not be finalized until next week when all the numbers are in and totaled.

But with the preliminary estimates from the USDA’s Agricultural Marketing Service and the National Agricultural Statistics Service factored in, the year’s slaughter clearly shows a tendency toward larger slaughter numbers.

Estimated hog slaughter last week, at 2.452 million head, was up 58,800, or 2.46%, from 2.393 million a year earlier and was up 153,336, or 6.67%, from the previous five-year average of 2.299 million, according to USDA data.

There is a strong seasonal trend for hog slaughter to increase in the fall as more farrowings occur in the spring and early summer.  This tendency used to be stronger, but some of these physiological tendencies have been bred out in order to smooth out how the meat enters the market along with the resulting price swings.

 

DRESSED WEIGHTS BELOW YEAR AGO

 

However, pork production is not as high as might be expected by just looking at the slaughter numbers.

AMS and NASS data show estimated pork production for the last week of October at 209 million pounds, unchanged from a week earlier but 1 million pounds, or 0.48%, less than the 210 million produced in the same week last year.

The latest pork production estimate, though, was 3 million, pounds, or 1.46%, above the 2010-2014 average of 206 million.  The trend also is following the seasonal trend upward into December.

It’s no wonder, then, that cold storage volumes are increasing.  The latest USDA Cold Storage report has total frozen pork supplies as of Sep. 30 at 642.0 million pounds, up 33.089 million, or 5.43% from the previous month’s 609.0 million but down 13.886 million, or 2.12% from last year’s 655.930 million.

And that’s not even counting the rising supplies of beef in cold storage.  The USDA last month estimated frozen beef stocks at 520.717 million pounds, up 44.124 million, or 9.26%, from 476.593 million on Aug. 31 and up 22.371 million, or 4.49%, from 498.346 million on Sep. 30 last year.

It’s also little wonder that prices for barrows and gilts are down.  Prices last week averaged $41.78 per cwt, the lowest of the year and $10.13, or 19.5%, below last year and $36.54, or 46.7%, below the 2010-2014 average of $78.32.

 

CASH CATTLE MARKETS QUIET, HIGHER

 

Only a little cash cattle cleanup action was reported in cattle markets Thursday after being very active with higher prices Wednesday.

After trading last week at mostly $105 per cwt on a live basis and $158 dressed, cattle sold this week from $107.50 to $110 live and at $168 to $170 on a dressed basis.

Earlier Wednesday, cattle sold in the online Superior Auction at $105.50 to $108.25 in the south to $103.25 to $108.25 in the north.

The USDA’s choice cutout Thursday was $0.29 per cwt lower at $182.31, while select was off $0.60 at $167.10.  The choice/select spread widened to $15.21 from $14.90 with 125 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $126.44 per cwt, up $0.53.  This compares with Thursday’s Nov settlement at $126.97, unchanged