USA: Processor margins pressured by high hog prices

Hog slaughter numbers were seasonally higher in November, but Q4 federally inspected (FI) hog slaughter numbers are likely to finish out the year lower than a year earlier, in line with information reported in USDA’s September “Quarterly Hogs and Pigs” report, noted USDA economist Mildred Haley in the latest “Livestock, Dairy, and Poultry Outlook” report. According to Haley, the September report indicated that the spring pig crop—from which November slaughter hogs would be drawn—was down 1% from a year earlier. Estimated November FI hog slaughter totaled 10.9 million head, almost 2% lower than November 2021. Processors paid higher prices for fewer head slaughtered in November, with the average live equivalent price of 51-52% lean hogs at $63.72/cwt., almost 17% higher than average prices in November 2021. Haley noted that estimated FI pork production in November—about 2.3 billion pounds—reflects both fewer hogs slaughtered and slower growth in dressed weights. Further, she said ...