Hogs & Pigs Quarterly Report June 2017 / Overabundant Supply
Synopsis: Who is going to eat all this pork? Production is sharply outpacing demand.
The current weekly pork slaughter capacity is 2.453 million head given a 5.4 day work week.
When new slaughter houses open this fall, capacity will increase with an additional 137,019
per week and 185,096 in Fall of 2018. Producers are farrowing more hogs to expand the
amount of pork to bring to market even as the market hog inventory continues to climb.
Slaughter Capacity
* The Prestage Plant, won't be in Mason City, IA, but is now being built in Wright County.
"So we could have a 6+% increase in 2018 plus 1% or so more from two years of 0.5% growth in average weights. Seven percent more pork in two years is a bunch. Add another 2.2% to slaughter and 0.5% to weights in 2019 and you have another 2.7% for a total of nearly 10% in three successive years.U.S. population is growing at roughly 0.7%, so per capita availability will increase sharply."

An overabundant amount of pork is coming to grocery stores. Production is sharply outpacing demand.
Who is going to eat all this pork?
Nothing has significantly changed in export demand over a 5 year average.
Total exports and leading export markets:
As you can see for 2017, there's been an uptick in exports to Mexico, but a drop to China and Hong Kong.
China is reducing their imports as their own hog prices continue to fall due to overabundance.
Chinese hogs are now 300 yaun per killogram compared to last year's 960 yaun.

March 2017 Hogs and Pigs Quarterly Report
  • Projected a 1% increase in farrowing from March through May.
  • Market Hog Inventory continues to climb.
  • The next Hogs and Pigs Report will be released Thursday June 29, 2017 at 3 pm Central.
  • I'm anticipating increased expansion in the midst of high inventory which is bearish futures prices.
Record setting hogs coming to production is beginning to affect Lean Hog futures. Here is a chart of October Lean Hogs. Many in the industry suspect it will test the lows of last fall, and possibly sooner in the month of July or August and trade even lower in following months.
For the coming week of June 19-23, watch for price breakdown below last week's low of 65.525.

Seasonal High