It now appears that long-anticipated reductions of 10 percent or more in hog supplies are showing up in the marketplace.  In fact, the estimated slaughter total for the last two weeks of August fell almost exactly 10 percent under year-ago.  This week’s result is expected to drop about 12 percent under the total for Labor Day week in 2013.

Diving hog weights also appear to be pointing to tighter market-ready swine supplies. Barrows & gilts sold in the Iowa-Southern Minnesota region averaged 280.6 pounds/head last week, which represented a 1.5-pound weekly drop, although it still topped the year-ago figure by 10.4 pounds.  Still, having weights decline so sharply in August is unusual, thereby suggesting producers were marketing their animals quite actively and reducing available supplies and pork production per head.

The supply disparity will probably begin diminishing next week (since PEDV outbreak totals on veterinary reports peaked in late February). Still, one can certainly argue that the severity of the mid-summer price breakdown, as well as the relative supply reduction, will tend to exaggerate the traditional September hog/pork bounce.  On the other hand, some skepticism about the bullishness that has pushed the October future to a 7.2-cent premium over current spot quotes seems justified. As a result, we favor again boosting coverage of planned autumn-winter marketings at moderately higher levels.

Editor’s Note: Dan Vaught is a livestock economist for Doane Advisory Services, St. Louis, Mo. Doane distributes a number of timely, relevant newsletters to farmers that contain expert commentaries and market advice. For more information, call 314.569.2700 or go to: