Certainly 2004 will set a slaughter record for market hogs. It looks like final numbers will be around 104 million head. But that record won't last for long.
All indications point to the fact that more hogs will head to packing plants next year.
Packer capacity is expected to increase by late 2005, according to a National Pork Board study recently released. The study shows that current daily capacity is 407,875 head. That includes only federally inspected plants and is directly comparable to USDA's daily hog slaughter estimates under federal inspection.
While the fourth quarter of any year registers the largest slaughter runs, next year could push the equilibrium to a new level. Ron Plain, University of Missouri agricultural economist, points to USDA's quarterly Hogs & Pigs Report, which showed the breeding herd on Sept. 1 was up 1 percent from a year ago, and that producers planned to boost sow farrowings by 1 percent.
There will be some growth in slaughter capacity by next fall. The question is, will it be enough? Triumph Foods, a producer venture, is supposed to open a new plant in St. Joseph, Mo., by late 2005. It will add about 8,000 head to the United States' daily capacity. NPB's packing plant survey showed that the top four pork packing companies now cntrol 64.7 percent of the U.S. hog slaughtering capacity, with the top eight firms having 82.5 percent. Of companies that can process 2,500 hogs per day, Excel had the largest capacity increase during 2004 at 4,000 head. Hatfield Quality Meats increased its capacity by the largest percentage, at 30.8 percent.
U.S. plants consistently operate at just more than five days a week by using plants on Saturdays. If needed, the U.S. plants can operate at 5.5 days per week for sustained periods and up to 5.8 days per week for a few weeks. Bottomline is that plants do have to shut down for maintenance, and labor is not an unlimited resource. As the industry saw in 1998, there is a price to be paid for pressing packing plants too hard for too long.
For more insight into NPB's packing plant study, go to www.porkboard.com