CME: Barrow and Gilt Weights Significantly Lower

First a primer on the different measures of hog weights that are available from USDA:

• Estimated carcase weights are published each Friday in USDA report SJ-LS712, Estimated Weekly Meat Production Under Federal Inspection. This number covers all animals slaughtered under federal inspection, including barrows and gilts, sows, boars, roaster pigs and lightweight or "off" hogs.
  
  
• Actual carcase weights for two weeks past are published each Thursday in USDA report SJ-LS711, Actual Slaughter Under Federal Inspection. Today’s report, for instance, will contain data for the week ending 5 November. This report provides actual average weights for all hogs (the same as the number provided in bullet point one) plus separate weights for barrows/gilts, sows and boars.
  
  
• Average weights of barrows and gilts reported under mandatory price reporting (MPR) are published daily in LM-HG201, National Daily direct hog Prior Day Report — Slaughtered Swine. This data series covers only “top“ barrows and gilts (ie. slaughter barrows and gilts that generally fall in the packers’ preferred weight ranges, usually 230 to 320 pounds or so) since small plants such as the ones that slaughter roaster pigs and off hogs are not required to report. Relative to the other weekly data, they provide a virtual real time picture of the size of the primary segment of pork supply, top weight barrows and gilts. These data became available in 2001 when MPR went into effect.

The relationship between the three weight measures can be seen in the top chart. Even though the “Hogs“ weight includes sows and boars that usually average about 100 pounds heavier than do top barrows and gilts, the average weight of all hogs is usually about the same as the MPR barrows and gilts weight because of the inclusion of roaster pigs and off hogs which may be as light as 40 pounds.

The weight for all barrows and gilts is significantly lower than the other two series due to the inclusion of these animals. Because of the differences of the weight series, we use them for different purposes. When looking at total pork supply, the all hogs weight is clearly the choice because it includes all classes of pigs and thus matches the weekly data for total slaughter. If one is trying to gauge how current pork producers are in their marketings, the MPR barrows and gilts data is, we think, superior because of its inclusion of only top market hogs and the fact that the number is available daily. That level of granularity, in fact, be misleading at times so one has to be a bit careful. But its availability adds a layer of detail that was not available prior to 2001 and we now have enough history to put the data into context.

So what are the data telling us now? We think the MPR data are telling us that higher market weights last fall and winter were not nearly as anomalous as we thought and that the trend to higher weights may be resuming.

The fall ‘10 weights were driven by superior quality ‘10-crop corn (note the relatively low weights from fall ‘09 through spring ‘10) and the presence of slack finishing space. Hogs ate better, grew better and could be left in buildings longer last fall and winter. But neither of those factors are at play this year and last week’s MPR weights were HIGHER than one year ago. We think there are two drivers. First, packers have increased the acceptable weightranges in their buying grids, allowing heavier hogs to earn premiums. Second, hogs are better — growing faster on less feed — due to better genetics and better disease control and treatment.