According to USDA, the fourth quarter of the calendar year is typically the one in which pork production achieves its maximum. This is largely due to biology. Sow fertility rates tend to be higher during periods of cooler temperatures than during hot summer months. Hogs that are being slaughtered and processed right now —the fourth quarter of the calendar year — were largely born in the March-May quarter, meaning that sows farrowing in these quarters were bred in cooler months, anywhere from late 2015 through late winter 2016. It follows, then, that fourth -quarter hog slaughter usually accounts for more than a quarter of annual slaughter.
Since the summer, weekly hog slaughter has been running generally above 2015 levels, with several recent weeks in excess of 2.5 million head. Estimated weekly slaughter for the week ending October 22 was 2.533 million head, the highest weekly slaughter since the series began in 1955. Preliminary slaughter data for the weeks thus far in November point to slaughter at or near 2.5 million head. On the basis of October and early November slaughter data, the forecast for fourth -quarter commercial pork production has been raised by 30 million pounds to just under 6.7 billion pounds, 3 percent higher than a year ago.
Hog prices will continue to reflect very large supplies of slaughter-ready animals. Average fourth -quarter live equivalent prices for 51-52 percent lean animals are expected to average $34 -$36 per cwt, almost 22 percent below a year ago. At these price levels, it is unlikely that a large number U.S. hog producers are covering feed costs. Packer spreads remain very wide, even as wholesale values decline seasonally, meaning that hog prices are falling faster than pork prices. Consumers, however, are expected to benefit, to a limited degree, from large fourth -quarter hog supplies The ERS Composite Retail Pork Value averaged $3.79 in September, down 5 percent from 2015, and is expected to average in the mid -$3.50s per pound during the fourth quarter.
Wednesday November 16, 2016/ ERS-USDA/ United States.