As the U.S. pork industry wraps up the third quarter of 2013 and heads into the fourth quarter—the period of the year when hog slaughter and pork production reach their annual peak—the industry appears to be facing a situation where secondhalf slaughter numbers and hog prices are both expected to be year-over-year higher.
Higher hog prices for larger quantities of hogs indicate increased demand for hogs and pork. While high domestic prices of competing animal proteins—beef and poultry prices in particular—are almost certainly a factor in supporting strong pork demand, foreign demand for U.S. pork appears to be rebounding.
July pork exports were higher than a year ago, by 2.1 percent, for the first time in 2013. USDA lowered expected commercial slaughter numbers for both third and fourth quarters of this year, due to lower than expected weekly slaughter numbers from the start of third quarter in July through the first weeks of September. Even so, secondhalf slaughter is expected to be higher than in the second half of 2012.
Average dressed weights are also expected to be year-over-year higher. Consequently, thirdquarter commercial pork production—forecast at 5.7 billion pounds—is expected to be 1.2 percent above a year ago. Production in the fourth quarter–6.4 billion pounds—is expected to be almost 3 percent higher than a year ago.
Prices for live equivalent 51-52-percent hogs are expected to average $67-$68 per cwt in the third quarter, almost 10 percent above prices a year ago. Prices in the fourth quarter are expected to average $59-$61 per cwt, more than 2 percent above a year ago.