June 22, 2009

US hog slaughter rates in May and so far in June have averaged about 2.3 percent more than had been expected based on the US Department of Agriculture's March hogs and pigs survey.

 

The data show slaughters during the latest seven weeks have averaged just 0.7 percent below a year ago, compared with an expected decline of about 3 percent.

 

The March survey may have underestimated supplies by 1 percent to possibly 2 percent, but other factors also have contributed to the larger-than-projected slaughters during the latest seven weeks, said Glenn Grimes, agricultural economist at the University of Missouri.

 

Weekly slaughters in March averaged 96.2 percent of a year ago, which was below the USDA's forecast of 98 percent for that period. In April, weekly figures dipped to 94 percent of 2008, further below the government's supply estimates, which were projected at 97 percent for that month.

 

Grimes said the weekly and monthly tallies indicate that producers weren't aggressive sellers of hogs in March and April, and supplies began to back up a bit on the farms. Producers were anticipating a spring rally in prices that typically begins in late April, so some evidently held onto their hogs a little longer than normal, he said.

 

The weekly weight data also indicate slowed selling by producers in March and April. The USDA's Iowa/southern Minnesota weight figures for the end of February showed only a 0.2 pound increase from a year ago. By the end of April, the average had jumped to nearly 6.0 pounds above the previous year.

 

Through May and the first half of June, average weights in that region were up around 5 pounds from 2008, which Grimes said amounts to about two days worth of slaughter, or roughly 800,000 head. The extra weight has added to the amount of pork produced, contributing to the pressure on wholesale pork prices.

 

The shortfall in slaughter for March-April from expectations was around 500,000 head, based on the USDA's data and the March hog report's projections.

 

Cooler-than-normal temperatures across most of the Midwest in May and early June also contributed to the heavier weights, Grimes said. Daytime highs were moderate and the nights were cool, ideal conditions for hogs to grow rapidly.

 

On June 26, the USDA will release its quarterly hogs and pigs report for inventory data as of June 1.

 

Last week's cattle slaughter was estimated at 672,000 head, compared with 662,000 a week ago and 694,000 a year ago. Year-to-date cattle slaughter is down 5.3 percent from a year ago.

 

The week's hog slaughter estimate was 2.062 million head, compared with 2.075 million a week ago and 2.081 million a year ago. For the year, hog slaughter is off 4.2 percent.

 

The USDA estimated total beef, pork and lamb production for the week at 939.2 million pounds. Last week's output was 935.0 million pounds, and the year-ago figure was 952.1 million pounds. Year-to-date output is down 3.7 percent.

 

Broiler/fryer slaughter for the week was estimated at 160.805 million head, compared with 160.459 million a week ago and 166.930 million a year ago.