August 25, 2008

 

 

US hog slaughter throughout the summer has been closely tracking the USDA's June 1 estimates for marketing hog supplies.

 

With one week left in the three-month period from the effective date of the last hog and pig survey, the federally inspected weekly slaughter figures have averaged about 7.8 percent above a year ago.

 

In the June hog report, USDA's weight breakdown for marketing hogs showed the 180-and-over category up 10 percent from a year ago. The 120- to 179- pound group had a 9-percent increase forecast, and the 60- to 119-pound class was up 6 percent. Most of the hogs in the heaviest group were slaughtered in June. The next bracket made up most of July's slaughter, while the third provided the majority of this month's slaughter.

 

The average for the three groups after adjusting for the number of pigs within each category came to 8.1 percent, only slightly above the reported slaughter totals from June 2 through this week.

 

The USDA's June 1 survey estimates were right on target in projecting slaughter rates through the summer, said Glenn Grimes, agricultural economist at the University of Missouri. The projected and actual slaughter numbers were even closer after adjusting for a decline in imports of market-ready barrows and gilts from Canada during the same period, he said.

 

The USDA's June 1 estimate for the lightest weight group, or pigs under 60 pounds, was up 4 percent from a year ago. Most of those pigs will reach slaughter weight in September. Grimes said since the estimates for the three heavier brackets were so close to the actual data, he views the 4 percent larger figure for the lightweight group as a good bet. Fewer hogs being shipped in from Canada could trim the slaughter-ready hog supply by about 1 percent, he said.

 

Grimes expects slaughter rates during the three non-holiday weeks in September to average around 2.3 million head, compared with 2.230 million a year ago, an increase of 3.1 percent.

 

In the wholesale meat markets this week, pork prices fell US$5.55, or 5.9 percent from the record high of US$94.41 hit a week ago. Seasonal growth in supplies along with buyer resistance at both the export and domestic levels to the high prices weighed on the wholesale pork markets, analysts said. Also, grocers are reluctant to book much pork at this time to be delivered in late September and October so they will wait until closer to the time they need the product before making the purchases in hopes that prices will be lower by then.

 

Sow prices were higher again this week across the Midwest and are now two-and-a-half to three times what they were a month ago when the market was pressured by active culling. The USDA on Friday (August 22) reported the average price for light sows weighing from 300 to 450 pounds at US$46.98 for the latest week, compared with US$38.23 a week ago and US$14.17 for the period ended July 24.

 

Market analysts and livestock dealers said a combination of slowed sales of cull sows due to lower corn prices, an improved outlook for producer profitability next year, and strong demand from sow processors are the major factors driving prices up. The improved demand for sows has also been linked to a government purchase of up to US$50 million in pork products directed to child nutrition and other domestic food assistance programmes. The USDA announced in early May its plan to purchase the pork, and the product was to come from culled sows.

 

The USDA estimated total beef, pork and lamb production for the week at 959 million pounds. Last week's output was 954.1 million pounds, and the year-ago figure was 954.3 million pounds. Year-to-date combined meat output is up 4.7 percent.

 

Broiler/fryer slaughter this week was estimated at 167.412 million head, compared with 167.289 million a week ago and 166.796 million a year ago.