Weekly Pork Profit Maximizer – Food Service Edition

Highlights

Flooding is always a major issue as it tends to impact both infrastructure as well as hog supplies. During Hurricane Floyd (1999), some 100,000 hogs were lost together with millions of broilers and turkeys. At this point it makes no sense to speculate about the potential losses. In October 2016 the arrival of Hurricane Matthew in North Carolina caused hog slaughter to drop sharply one week but production quickly recovered the following week. Cutout values in mid-October 2016 rose to almost $90/cwt. By the end of October, the value of the pork cutout had dropped to $78, a 12.5% decline in two weeks.

The chart on page 1 shows the expected weekly hog slaughter for late September and Oct/Nov/ Dec. This is based on the inventory data presented in the June USDA survey. For the week ending September 15, we would have expected hog slaughter to be a little over 2.5 million head. Hog slaughter is expected to approach 2.6 million head by the end of this month and remain near those levels into October. If the storm causes plants to be idled for a prolonged period of time, it could add to product price availability well into the fall.