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Brumm: Impact of Heat ,less Ractopmine use and Falling Price on Slaughter Weight

Aug 16, 2016

By Mike Brumm

Anyone following the US slaughter hog market these past few weeks knows that weekly pig numbers are already growing. Weekly kills of 2.2 million are upon us already and we’ve got 3 months before the greatest crunch hits around the Thanksgiving shortened week.

In the past weeks I’ve commented that based on slaughter weights, producers haven’t been aggressive in pulling pigs forward. I’ve got to change my tune this week. For the first time since October, 2014, packer owned pigs were the same weight as producer sold pigs last Friday and this Monday. Is this a suggestion that packers who own pigs (or producers who own packing plants) are setting up their inventories to be able to kill all of the pigs in their flows this fall?

For the first 4 days of this week the average carcass weight of all pigs in the USDA LM_HG201 report have averaged only 206.9. This compares to the week average weights of 208.4, 208.0 and 208.0 the past 3 weeks. With only Friday and Saturday kills to fill out the week, this week will end up as the lowest of the year.

How much of the decline this week is producers pulling pigs ahead in light of the anticipated fall crunch and the rapidly dropping carcass bids and how much is due to the heat impacting feed intake this week? Minneapolis had a heat index above 100 on Wednesday so pigs in southern Minnesota weren’t eating much feed as the nights have remained quite warm also.

Finally, as I read in another commentary, how much of the decline is due to a decline in the use of ractopamine in late finishing diets? Many producers relied on this product as a tool to maintain summer weight gain and with the Chinese refusing to buy any meat or by-product from pigs fed ractopamine producers have limited their use of this tool.

As a point of reference, the weighted average barrow and gilt carcass weight for week 1 of this year was 215.7 lb so the decline since the first of the year has been over 8.5 lb

The good news this week for those of us buying feed ingredients – today’s USDA report says we’ll have plenty of corn this coming year. Bean meal should also remain relatively inexpensive unless the dollar weakens more and exports crank up to an even higher level than last weeks reported sales.
 

Source: Brumm