Dramatically higher slaughter rates in the fourth quarter of 2007 may have led to a pork glut in the United States--except for consumers' hearty appetite for The ‘Other White Meat’.
"While stronger pork exports have helped clear product from the market, domestic consumption has also been excellent," says Glenn Grimes, professor emeritus of agricultural economics at the University of Missouri. "This has translated into higher-than-expected prices for producers."
Many of the largest weekly hog slaughter numbers in history have occurred in the last 16 weeks. It's not surprising, since October and November 2007 slaughter rates rose 10.1 and 7.3 percent, respectively, from last year. In addition, pork production for those two months exceeded last year's levels by 11 percent and 8 percent, respectively. Add to that 9 percent more beef in October (November was only 1 percent higher), along with broiler production that exceeded last year's totals by 5 percent and 3 percent in those two months.
With that kind of supply, this would suggest a 45 percent decline in price, says Grimes, who notes that slaughter rates for January 2008 are nearly 15 percent above the same period a year ago.
"While we've seen a price decline, it wasn't anywhere near 45 percent, thanks to a 3 to 4 percent growth in demand."