US Swine Economics Report

by 5m Editor
4 September 2004, at 12:00am

Regular report by Ron Plain on the US Swine industry, this week looking at the USDA's hog slaughter figures.

Ron Plain
Ron Plain

Daily hog slaughter has been huge recently. If USDA's preliminary number holds up, we slaughtered 7,000 more hogs during the first 5 days of last week (1,985,000) than for any other Monday-Friday period in history. Last Monday's hog slaughter, estimated at 400,000 head, was the third largest daily kill ever, behind 406,088 on December 20, 1999 and 402,361 on December 22. 2003. Tuesday and Wednesday (399,000 each) tie as the ninth largest daily slaughter ever and Thursday (398,000) ranks 16th.

Federally inspected hog slaughter has been 394,000 head or greater on 64 days. Twelve of those days were in the last three weeks.

What is even more impressive about this huge slaughter is that it is early September. Normally the biggest daily slaughter comes late in the year. Prior to this year, the 20 largest daily kills occurred on 10 days in December, 6 in November and 4 in October.

For those who are worried about slaughter capacity, the good news is that we're slaughtering very few hogs on Saturday, thus far. Saturday's hog slaughter, 52,000 head was only a fraction of the record Saturday kill, 315,028 on November 29 of last year.

What lies ahead? More hogs. Seasonally, hog slaughter almost always increase as we move into fall. Based on USDA inventory reports, it looks like 2004 hog slaughter will total nearly 2 million head above the 1999 record of 101.5442 million hogs slaughtered. Year-to-date, hog slaughter is 3.1% head of last year's pace. We expect slaughter to end the year up 2.5% compared to 2003. If this estimate is correct, daily hog slaughter during the fourth quarter will be only slightly larger than last year.

There appears to be adequate slaughter capacity to avoid a repeat of the 1998 disaster. By the way, the biggest daily hog slaughter in 1998 was 394,887 head. There also appears to be sufficient pork demand to absorb this year's supply. Despite this week's huge kill, hog prices held steady with the previous week and were 45% higher than for the same week last year.

This is developing into one of the most remarkable years in history for hog producers. Record slaughter and fabulous hog prices are not a likely combination. Most of the credit for this should go to Dr Atkins and the other proponents of high protein diets. But at least some credit should go to hog packers who had the foresight to expand their capacity to slaughter hogs.

5m Editor