After several disappointing developments regarding hog slaughter capacity, some good news may finally be coming out of the Tar Heel State.

Smithfield Foods has made a request for the state to lift slaughter restrictions on its Tarheel, N.C., plant, which could increase annual slaughter capacity by 4.2 million hogs. The current slaughter cap is 32,000 head per day or 7.5 million head per year. It expires Oct. 31.

In other news in North Carolina, Premium Standard Farms is increasing its slaughter capacity by renovating the former Lundy Packing Company plant that it purchased at Clinton, N.C. The PSF plant reduced daily slaughter capacity during construction from 8,000 head to 6,500 head, but expects to be back up to 8,000 head by the end of the year and increasing to 10,000 head after that.

Any growth in slaughter capacity would be much appreciated, as declines in capacity have been making news recently. Earlier this month, Excel announced plans to close its Marshall, Mo., plant, which slaughters 8,000 hogs a day. This followed Seaboard’s announcement that it was canceling the construction of a new hog slaughter plant in Elwood, Kan., that would have had a daily capacity of 15,000 head when fully operational. However, the plant wouldn’t have been ready until 2003.

Projections place the number of hogs coming to slaughter in 2002 between 102 million and 104 million. In a best-case scenario, this would be very close to pressing slaughter capacity. If productivity increases at a higher rate than the 3 percent that USDA’s Hogs and Pigs Reports have indicated, or if sow numbers increase, there could be real trouble. If hog runs exceed slaughter capacity, which would certainly happen if 104 million hogs were sent to market, prices are likely to go into a free fall reminiscent of late 1998.