US Swine Economics Report: Record highs as health improves?

US - Report by Ron Plain on the US Swine industry.
calendar icon 9 October 2007
clock icon 3 minute read

There are a lot of hogs out there. Based on preliminary data, last week's federally inspected hog slaughter totaled 2.321 million, a new record. Last week's slaughter was 8 per cent larger than for the same week in 2006 and 2.49 per cent larger than the previous record of 2.264633 million hogs slaughtered during the week ending on December 19, 1998. Commercial pork production (the combined carcass weight of hogs slaughtered) last week was also a record at 461.9 million pounds, up 2 per cent from the previous record set the week ending December 18, 2004. These are records that may not last long. Typically, the biggest slaughter weeks of the year come in December.

Saturday's slaughter of 218,000 hogs was a record for a Saturday in October.

Hog slaughter this year has been consistently higher than expected based on USDA's quarterly inventory of market hogs. The March 2007 hogs and pigs report implied that March-May hog slaughter would be 1.55 per cent above the year-earlier number. Actual slaughter of US raised hogs came in up 3.35 per cent .

The June 2007 hogs and pigs report implied that June-August hog slaughter would be 1.9 per cent above the year-earlier level. Actual slaughter of U.S. raised hogs came in up 2.5 per cent .

The September 2007 hogs and pigs report indicated that hog slaughter during September and early October would be 3.4 per cent above the year-earlier level. Actual slaughter of US raised hogs for the last 5 weeks has been up 4.7 per cent .

Why have USDA's estimates been too low?
There are lots of possibilities. Producers may be misleading USDA in their responses to the quarterly inventory surveys. USDA may be surveying an unrepresentative sample of producers who are expanding more slowly than the average. My bet is that herd health is improving rapidly, due in large part to the increasing availability of circo virus vaccine, causing a drop in death loss and an increase in slaughter. Healthy pigs also grow faster which means an earlier slaughter date and more pork on the market.

My explanation for the slaughter discrepancy is a safe one. Since there is no good data on national death loss, it will be hard to prove me wrong.

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