CME: Slaughter Estimates During 'Missing Weeks' Up Six Per Cent

US - An errata is in order this morning. If you looked at the previous statement yesterday about USDA hog inventories "underestimating" recent slaughter and said "What?", you were quite well-founded. Obviously, the September report has thus far overestimated pig numbers relative to last week’s slaughter and what we believe to be the slaughter levels of the two previous weeks, write Steve Meyer and Len Steiner.
calendar icon 23 October 2013
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Our previous hypothesis that hot weather in August and poor quality end-season corn caused a slowing of growth rates and thus a backing up of supplies has already gotten quite stale since cooler temperatures in September and fresh corn should have had supplies catching up. A surge in slaughter in the next few weeks would perhaps restore credence to both our hypothesis and the September report estimates. Right now though, both look wrong and we, like many of you, are concluding that there simply are not that many hogs out there.

Perhaps the most troubling aspect of this situation, though, is that it is casting doubt on the 1 September hog inventory estimates that, to many, were the most reasonable. Recall that the big surprise in that report was the LIGHTER WEIGHT categories and the June- August pig crop which most expected to be reduced by PEDv (porcine epidemic diarrhea virus) losses. The pigs coming to market the past three weeks would have been in the 120-179 pound inventory category which was estimated to be 1.5 per cent larger than one year ago.

As can be seen below, slaughter estimates for the two "missing" weeks were as much as 6 per cent LOWER than one year ago. As detailed below, we will eventually get the slaughter and production figures for those two missing weeks so we won’t have to guess at them much longer.

Pages 2 through 4 today (see link below) present the "Notice to the Trade" released yesterday by USDA’s Livestock, Poultry and Grain Market News (LPGMN) detailing its plans to publish data missed during the federal government shutdown. Some highlights are:

  • LPGMN will publish summary reports for most of the mandatory price reporting data covering the shutdown period of 1-16 October. The driver of this decision is the definition of a "reporting day" in the original mandatory price reporting act which says that packer must report only on days that USDA is open for business. Due to that language, some packers did not report each day during the shutdown. Some data were submitted en masse upon the agency’s re-opening on 17 October making it impossible to put the back data into daily or even weekly reports. Thus, summary reports are about the best USDA can do for those data. Those reports were supposed to be available yesterday but we could not locate them on the LPGMN website. We will try to provide a link to the summaries tomorrow. The Notice provides a list of the various reports that will be summarized.

  • Summaries of boxed beef, wholesale pork and lamb cut data for the shutdown period will also be published. Again, LPGMN says those were published yesterday but we could not see them on the website this morning.

  • Cutout values for he shutdown period will not be available until "a later date by 28 October" due to the amount of information involved and the complexity of the calculations.

  • The majority of market information collected through voluntary reporting will not be back-filled since there was no one on hand to capture the data at the time it was available. The primary exceptions to this are programs run through federal-state cooperative agreements where state employees were still working during the shutdown. Those data will be posted to USDA’s archives.

  • Actual slaughter data for the week that ended 21 September was published on Friday and can be found at http://www.ams.usda. gov/mnreports/sj_ls711.txt. Actual data for the weeks of 28 September and 4 October will be published Thursday, 24 October. Data for 12 and 19 October will be published on 31 October.

  • Weekly data on livestock imports from Canada and Mexico will be available since those data are collected at our borders by Animal Plant Health Inspection Service personnel who worked during the shutdown since they were deemed "essential". LPGMN will post them to the website "by next week".

In addition to these data from AMS, USDA’s Foreign Agricultural Service will publish August export data this Thursday, 24 October. Those data were originally scheduled to be released on 9 October. September export data will be published 14 November versus their originally-scheduled 6 November release.

Further Reading

You can view the full report by clicking here.

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