By Bruce Cochrane.
H@ms Marketing Services reports the latest U.S. Hogs and Pigs Report paints a disturbing picture for fourth quarter live hog prices.
The USDA's Quarterly Hogs and Pigs Report, released Friday, showed the number of hogs kept for marketing was much higher than anticipated.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says we have been on a trend toward larger numbers but the forecast exceeded even the most bearish estimates.
Tyler Fulton-h@ms Marketing Services:
The last week of September we slaughtered an estimated 2.466 million hogs.
That was a shock in that it was significantly higher than expectations.
There was a belief that the hog producers in the United States were pulling animals ahead of their normal schedule just to keep their weights down and manage the flow in advance of the coming fall months that we expect the highest numbers.
That week was followed up by another week of close to 2.45 million hogs.
How that compares to the estimated U.S. slaughter capacity is roughly around 2.5.
There is some kind of flexibility in there in that some shifts can be moved around, added even to a Sunday or even have sows replaced by barrows and gilts, by market hogs.
But, for the most part in terms of a longer stretch of time, we'd be looking at a hard cap of around 2.5 million hogs.
So when we see weeks already coming within 40 and 50 thousand hogs of that hard cap it's concerning.
Fulton says it's hard to say when the biggest slaughter months will be but they are typically in late November or early December so that's probably crunch time as far as when hog numbers might exceed slaughter capacity.
Source: Farmscape