The plummeting hog prices of late August have the entire industry worried and scrambling to figure out what will happen the remainder of the year.

Unusually large slaughters in late August, with consecutive weeks of 1.96 million head and 2.01 million head, have led to two possibilities for the remainder of the year, which yield very different price prospects.

One theory is that producers have pulled as many as 500,000 hog marketings forward and out of the dangerous fourth quarter. If that is the case, fourth-quarter prices may mirror third-quarter prices, averaging near $30 per hundredweight, says Glenn Grimes, University of Missouri agricultural economist.

Slaughter weights provide some hope that may be the case, says Grimes. Slaughter weights for 79 percent of the hogs sold in August were 1.3 pounds less than in 2001. The other 21 percent of the hogs were 1.7 pounds heavier than a year ago, which Grimes attributes to marketing contracts that shift price risk away from producers. Slaughter weights continue to muddy the waters, though, as some regions, including Iowa and Minnesota have had weights remain slightly above last year.

If marketings have not been pulled forward, the price picture gets much bleaker. If USDA’s June Hogs and Pigs report actually missed more than 300,000 hogs, then 2 million head per week slaughter may become the norm for the remainder of the year.

If that is the case, slaughter capacity will have been exceeded and prices will likely plummet to1998 levels or below, with single digits being a distinct possibility.

USDA reports have not had the most reliable track record, as the challenges of tracking Canadian feeder pigs and plain-old sample error tend to underestimate the number of hogs rather than overestimate them.

A combination of both scenarios is most likely what is actually happening. Which situation is most responsible for the huge slaughter numbers of late August is the question that will determine whether prices are in the single-digit range or in the grim-but-survivable $30 range.