The week ending Nov. 1 slaughter was close to expectations based on USDAs September Hogs and Pigs report, but has risen the last two weeks, says Ron Plain, University of Missouri agricultural economist. Over the course of the last two weeks slaughter was over 3 percent above last year and at least 3 percent above expectations.
Increased slaughter imports since the first of September have added about 1.4 percent to our slaughter, but slaughter since the first of October has run between 2.5 percent to three percent above last year. The September report indicated slaughter would be below last year. The miss is between 2 percent and 3 percent of slaughter.
Plain says the probabilities are high that pork is getting some demand pull from the very high beef prices. In September wholesale choice beef prices were 23 percent above January beef select wholesale prices were only 6 percent higher than nine months earlier. By October choice beef prices were nearly 40 percent above January and select wholesale prices were over 27 percent above January. So the odds are high that the beef supply that is most competitive with pork did not show a big increase until October.
Most of the nearly $15 per hundredweight live hog prices in September of 2003 than 2002 came from squeezed market margin. The producer’s share of the consumer dollar in September this year was 27 percent. In 2002, the producer’s share in September was 18.2 percent.