As anxious hog market participants fret over increased pork supplies expected this fall hog prices continue to decline amid more animals coming to market. Hog slaughter totaled 8.57 million head for July, up 5 percent from July 2011, according to USDA's National Agricultural Statistics Service (NASS) Livestock Slaughter report released Friday.

Pork production for July totaled 1.72 billion pounds, up 5 percent from the previous year. The average live weight, at 269 pounds, was up 1 pound from the previous year.

October's Lean Hog contract has set a new low, closing Thursday at $72.575 per hundredweight.

As feed costs escalate, producers are reacting by sending more hogs to market. "Producers have accelerated marketings as projected losses increase with each upward gyration in feed values," according to Steve Meyer and Len Steiner, authors of CME Daily Livestock Report.

Adding to the pork supply is an increase in sow slaughter, currently running 7 percent to 10 percent above one year ago, according to the authors.

"Some expect the liquidation to be even larger in the fall."

Meanwhile, beef production, at 2.20 billion pounds, was 3 percent above the previous year. Cattle slaughter totaled 2.79 million head, up 1 percent from July 2011. The average live weight was up 23 pounds from the previous year, at 1,295 pounds.