Record August US pork output likely on bigger hogs

 

 

The odds appear to be growing for US pork production to set a new record for the month of August even if hog slaughter comes in a bit short of the monthly high set in 2007.

 

Heavier hog weights, meaning more edible pork from each animal processed, are adding to the total output. The extra weight could more than offset a modest shortfall in the number of animals harvested at the processing plants.

 

Ron Plain, agricultural economist at the University of Missouri, said the odds are better than 50-50 that August pork production will top the current record, which was set in 2007. He also said the US Department of Agriculture's weekly data from July indicate a possible record high in pork production for that month as well. USDA will release its monthly totals for July Friday morning.

 

This year, August has 21 weekdays and five Saturdays unlike 2007 which had 23 weekdays and four Saturdays. Having two fewer weekdays this month makes it unlikely that packers will be able to process more hogs this month than they did two years ago, analysts said.

 

Average daily and weekly slaughter rates in August, however, may reach new highs for that month. Hogs are readily available and processors have so far shown a willingness to push large numbers of animals through the plants during the last two weeks, analysts said.

 

In 2007, the largest federally inspected daily slaughter figure in August was just over 415,000 head. As of Thursday, there have already been seven days this month in which daily estimates have exceeded 425,000.

 

Plain expressed confidence that the daily and weekly average slaughter rates will set new records for August. The fewer number of weekdays in the month, though, could keep the monthly total from making a new high, he said.

 

Based on projections for this week's federally inspected slaughter to be in the area of 2.230 million and a similar to possibly larger figure for next week, the monthly total is expected to be about 9.292 million head. That could put commercial slaughter, which includes state-inspected facilities, for the month around 9.350 million, about 50,000 head short of the 2007 August figure.

 

Hog weights in Iowa/southern Minnesota, the largest swine-producing region in the country, have been running nearly 10 pounds per head on a live basis above a year ago. The USDA estimated last week's pork production up 7.5 percent from a year ago on a slaughter that was up 4.5 percent. The additional 3 percent in output came from increased hog weights.

 

Even if the large year-on-year spread in weights seen last week declines a bit in the monthly figures, there could still be enough of an increase from 2008 and 2007 to result in a new high in pork output for August.

 

The abundant pork supplies combined with the weak world economy and effects of the novel AH1N1 influenza have weighed heavily on wholesale pork prices. USDA's daily pork cutout values in August have averaged 40 percent below a year ago.

 

Analysts and meat brokers predict wholesale pork and cash hog prices will remain weak through September and into the fourth quarter.