Sow slaughter from domestic producers for September through the week ending Oct. 18 has been down 64,491 from the same weeks in 2002, say Glenn Grimes and Ron Plain, University of Missouri agricultural economists. That means there is a good possibility that producers are building the breeding herd.

Gilt slaughter is running below 2002 levels since the last of September, but is at a level that indicates equilibrium as to sow herd size. However, the reduction in sow slaughter from last year for the last 7 weeks amounts to about 1 percent of the breeding herd.

Slaughter continues to run above expectations, but is smaller this week than a year ago due to a very large slaughter this week in 2002. Grimes and Plain say October has set a new record high in pork production for a month. October 2003 slaughter has been above October 1998. However, one of the main reasons for the larger slaughter this year in October than in 1998 is that there was one more weekday in October 2003 than in 1998. On a daily basis slaughter for 2003 has been the same to up a little from 1998.

Even though times in the pork industry are tough, things could be worse say the Missouri economists. With pork production up a little for the first nine months of the year, the live hog prices have been nearly 12 percent better for the same period vs. last year.

These higher prices than 2002 do not appear to come from increased consumer demand. Retail pork prices for these 9 months were down a little over 1 percent based on USDA data. The data indicates the stronger live prices are squeezed marketing margins mostly for the processing and retail margins. Packer margins were down less than 1 percent for the period compared to over a 6 percent decline for retails and processes.