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CME: Barrow and Gilt Slaughter Above Last Year's Levels

15 August 2016

US - Today we will look at the recent trends in the components of pork production; that is, slaughter levels and carcass weights. To do that we use the Actual Slaughter Under Federal Inspection report developed by USDA-NASS and released/posted by USDAAMS (Market News) on their website, write Steve Meyer and Len Steiner.

The latest weekly report was released yesterday with data for the week ending July 30th.

US weekly Federally Inspected (FI) barrow and gilt slaughter has mostly been near year ago levels so far this year and above the prior 5-year average (2010-2014). Over the last three weeks of data, FI barrow and gilt harvest has averaged 2.5 per cent above 2015’s and was 10 per cent larger than the 2010-14 average level.

Seasonally, weekly slaughter has begun to pick-up and will peak during the fourth quarter. Last year, peak slaughter weeks in mid-December by many accounts stretched slaughter capacity near its limits.

Weekly average slaughter for the fourth quarter of 2016 is forecast by the Livestock Marketing Information Center to be up about 3 per cent year-over-year. We will see how the industry manages through that given some increase in capacity compared to a year earlier and that packers have had several months to prepare. Continuing on with the barrow and gilt component of pork production, we turn to dressed (carcass) weights.

So far in 2016, those weights have generally been at or below a year earlier. Barrow and gilt slaughter weights drop seasonally as summer sets-in and hot conditions impact animal growth rates.

In the last three weeks, FI weight has averaged 1.3 pounds below 2015’s and 4.9 pounds above the prior 5-year average. The longterm trend for hogs, as is it for other livestock and poultry species, is for weights to increase.

A factor to consider in the rather consistent year-over-year slippage in barrow and gilt weight this year is the movement away in the use of Ractopamine, a widely used feed additive, as part of a healthy, balanced diet to help pigs convert dietary nutrients into lean muscle. That feed additive has been determined to be safe by the US Food and Drug Administration and is approved for use in pork production in many other countries.

However, it is not accepted by the Chinese government. For several years, media stories and company reports have indicated Smithfield Foods Inc., the largest US hog producer and pork processor and a unit of China-based WH Group Ltd., was shifting away from Ractopamine use.

Other US processors also have made changes to tap into the China market. If that trend continues, hog weights may not be done posting year-over-year declines.

Finally, we will review US sow slaughter levels, as those are a key indicator of breeding herd changes. Weekly FI sow slaughter in May and June of this year mostly ran below 2015’s level and often below the prior 5-year average. Recently, sow slaughter has been at or slightly above a year ago. If recent trends in sow slaughter levels persist, we would expect little indication of breeding herd growth in the USDA-NASS count as of September 1, 2016 for the next Quarterly Hogs and Pigs report (to be released September 30th).

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

ThePigSite News Desk

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