Pork Checkoff Industry News

Hog futures have been volatile, in part due to rush of speculative interest in the last quarter of 2024. Market participants now are looking to see how well pork demand holds up to start the year.

Hogs and Pigs inventory implies higher slaughter starting in the spring and through the end of 2025. Report accuracy has come into question, however, and injected more uncertainty going forward.

Last week hog slaughter was 2.56 million head compared to near 2.7 million for the comparable week a year ago. In the last three weeks, slaughter has been down by almost 500k head y/y. This has significantly impacted spot supply.

The short holiday week tends to create a lot of disruptions for both hog processors and manufacturers. Market will return to a more normal flow in the next two weeks.

Hog slaughter remains constrained, and all indications are that slaughter in the next two weeks will remain well below year ago levels.

Lean hog futures are now trading at contract highs, not just for the nearby market but also for next spring and summer. Hog supply coming to market has been slightly lower than previously expected; however, the key driver has been the higher prices paid for pork bellies, and to a lesser extent, hams.

Hog slaughter finally broke over 2.6 million head but it remains well below expectations. Supply is expected to slowly trend higher and this should help ease some of the price pressures across the complex.

Futures have rallied the last two weeks as market participants now expect Q4 production to be less than previously thought. USDA ‘Hogs and Pigs’ survey suggested Sep-Nov slaughter could be up as much as 4% y/y. Instead slaughter since September 1 has been almost unchanged.

Our estimates are that the breeding herd on September 1 was down 2.5% from a year ago. The inventory of market hogs this fall should be adequate based on the pig crop last spring. Supply growth will be limited this winter and next spring as productivity is expected to return to trend and smaller herd limits farrowings.

Hog slaughter beat estimates at +2.3 million head, +3.6% above year ago levels. Expectations are for slaughter to ramp up in the coming weeks. Last year weekly slaughter between mid-September and early October averaged 2.57m head/wk. Given current growth trends, we could see weekly slaughter at or above 2.6 million in the coming weeks.