CME: Hog Slaughter Lower Than a Year Ago

by 5m Editor
19 November 2013, at 6:20am

US - Hog slaughter for the week was 2.347 million head, still about 1.3 per cent lower than a year ago but the largest weekly slaughter so far this year, write Steve Meyer and Len Steiner.

Hog slaughter numbers were a little larger than expected earlier in the week and show that producers may be a bit more motivated to move hogs given the sharp increase in hog carcass weights.

The preliminary USDA estimate for hog carcass weights last week was 209 pounds per carcass. We think this number likely understates reality by as much as 3 pounds.

The data from the Mandatory Price Reporting system shows that hogs coming to market last week were much heavier than that. Our 5-day moving average for the week stood at 212.7 pounds, 3.1% higher than a year ago. Please note that this includes both producer and packer owned hogs.

The average of producer marketed hogs currently stands at 211.5 pounds, about 3% higher than last year. The pork cutout averaged $93.34/cwt fort the week but prices were weaker on Friday. Lower ham, belly and rib prices pushed the cutout down by about $2/cwt.

Pork has benefited from lower hog numbers and strong demand this fall. And while producers in the short term may opt to accelerate marketings, there are lingering concerns as to the overall supply of hogs in the pipeline after 1 January.