Pork Profit Maximizer – Retail Edition

Hog slaughter numbers so far are lower than previously expected. Take the slaughter numbers from last week. Initially, USDA pegged hog slaughter for Tuesday at 473,000 head, which would be a full slaughter run given current capacity. However, that number was revised lower by about 22,000 head as an accident caused a major plant to shut down for a good part of the day.

The slaughter that was lost on Tuesday was not made up on Saturday, however, in large part because packers in other parts of the country so far have not been incentivized enough to increase the number of Saturday shifts. Saturday slaughter was 181,000 head, down 22.8% compared to a year ago. Total hog slaughter for the week was 2.489 million head, 0.9% lower than a year ago. For the period Aug 27 – October 13 total hog slaughter was 16,891 head, down 0.4% lower than the same period a year ago.

The year over year decline represents a very stark difference from the USDA ‘Hogs and Pigs’ report that suggested slaughter during this period should have been about 3.5% higher than last. The decline in slaughter and shortfall in pork production has helped bolster cutout values, which are currently close to $80/cwt. Additionally, producers in the Midwest appear to be relatively current, as evidenced by hog weights that have increased only modestly and in line with normal seasonal patterns.