Seaboard Corporation recently announced it is scrapping plants to build a pork processing plant in Elwood, Kan. While this plant would not have been up to full strength until sometime in 2003, the hogs it could slaughter might have eased tensions just enough to avoid a disaster in late 2002.

As it now stands, slaughter for 2002 is expected to be between 102 million and 104 million head. Either number will be a record, but slaughter nearer to 102 million, should avoid a price disaster like in 1998, says Ron Plain, University of Missouri agricultural economist. In comparison, 101 million hogs were killed in 1998, but some slaughter capacity has been added between then and now.

“Our original data showed that if the industry continued to grow on cycle trends we would produce 104 million hogs to slaughter in 2002. But we don’t have the capacity to kill that many hogs,” says Plain. “I think and hope that producers have heard the message and we now think that number might be closer to 102 million head, which is a much more manageable number.”

Productivity gains have been a big reason that capacity may be challenged again next year. Pigs per litter has been on a steady rise, meaning more pork is being produced with the smallest sow herd in history. This also means slaughter capacity can be challenged without any significant growth in the sow herd.

If the worst cases come true and 104 million head come to U.S. slaughter plants in 2002, Plain says the $8 per hundredweight hogs from December 1998 may seem like a good deal, as prices could plummet to those levels and below.