Source: MEATINGPLACE, 9/1/16

Weekly data show hog slaughter is outpacing the rate implied in USDA’s June Hogs and Pigs report and weighing heavily on futures market prices, according to the latest analysis from the Daily Livestock Report. 

The latest weekly data show slaughter running 2.7 percent higher than a year ago and 1 percent higher than projected by the Hogs and Pigs report, the report noted.

“There is little question that the rapid increase in hog slaughter in late July and August has put significant pressure on the market,” the analysts said, adding that heavier hog weights in recent days contradict the theory that producers may be pulling hogs forward.

Bearish demand
Demand over the long Labor Day weekend will be important because retailers and food service operators will assess clearance before booking additional product, they added.

Hog values are down 25 percent since June, they note in a second report that lays out a glum demand scenario.

Among the pressures: declining restaurant traffic as retailers increase prepared food offerings priced at a fraction of the cost of dining out, lower costs for food prepared at home vs. rising costs for food consumed away from home, disappointing pork export shipments and a worsening economic outlook.

“However you spin things, recent trends are quite negative and do not bode well for  protein demand, the analysts wrote.

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