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US Swine Economics Report

by 5m Editor
8 June 2004, at 12:00am

Regular report by Ron Plain on the US Swine industry, this week saying that hog slaughter continues at record levels.

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Ron Plain
Ron Plain

During January to May 2004, commercial hog slaughter in the U.S. totaled 41.95 million head, nearly 400 thousand more than in the first 5 months of 1999 and 288,000 more than in January-May 1980, the previous record holder for the start of a year.

Prior to this year, daily hog slaughter had never exceeded 390,000 during the period between January and August. (At least not according to my records.) Thus far in 2004, we've had 6 days in February, one day in March, 4 days in April and 2 days in June with slaughter above 390,000.

This huge slaughter was not unexpected. The market hog inventory in USDA's last quarterly hog report only slightly underestimated the actual slaughter during the last 14 weeks, and 75% of that miss was due to an increased number of slaughter hogs being imported from Canada.

The record for annual hog slaughter is 101.554 million head in 1999. It looks like 2004 will break that record by nearly 2 million head.

Records are made to be broken and with more people to feed, one can't be too surprised by what's happening with hog numbers. What is surprising is the strong prices that have accompanied this record kill. During the first five months of the year, barrow and gilt prices have averaged nearly $47.00/cwt pf live weight, 27% more than a year ago and the highest for any January-May since 1997. It looks like this week's slaughter will exceed 1.9 million for the first time ever during June, and we had some $60 hogs today at Sioux Falls.

Hog prices are high because consumer demand for meat is increasing very rapidly. Just when this demand surge will end is nearly impossible to predict. For the time being, hog producers are making money, something that has occurred rarely in the last two years. Enjoy.

5m Editor