Jim Long Pork Commentary, U.S. Annual Hog Slaughter Decline , January 23rd 2023

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U.S. Annual Hog Slaughter Decline

Last week the USDA published the actual hog slaughter for 2022.

Barrow + Gilts

(1,000 head)

2021 124,861.1
2022 121,314.1
Difference -3,547.0

 

Year over year the official U.S. Barrow and Gilt slaughter is down 3.547 million head. A big drop and one we expect decline to continue through 2023.

Of note, the total U.S. slaughter in 2020 was 131.563 million head. If our arithmetic is correct about 10 million more head than in 2022. The large decline is a reflection in our opinion of the lack of profitability our industry has been dealing with.

U.S. Red Meat Production

(billion pounds)

  Pork Beef Total Red Meat

(includes lamb + veal)

2020 28.3 27.2 55.8
2021 27.5 27.48 55.198
2022 26.9 27.83 54.876

 

U.S. pork production in 2022 is down 1.4 billion pounds from 2020. Beef up just over 500 million pounds in the same time frame. We expect both will be lower in 2023 cutting red meat availability and supporting both Beef and Hog prices.

Last Friday market close

U.S. Pork Carcass cut-out 79.99 lb.

U.S. Choice Beef Carcass cut-out 271.70 lb.

Seems to us producing Pork that chases Beef might be good business. Taste matters.

Appears where hogs got backed up during holidays shortened slaughter and weather issues hog weights jumped. They appear to have begun declining with the latest Iowa – S. Minnesota weights 290 lbs. down 1.7 lbs. from the week before. We expect to see the ongoing decline in the coming weeks.

Other Observations

  • The price spread between European Hog Prices and the U.S. is quite large. Last week the largest European Pork Exporter country Spain hog price of 81¢ U.S. lb. liveweight (1.645 Euro/kg). U.S. live hog price 56¢ lb. (76.63 carcass). The 25¢ lb. spread is over $60 a head advantage to the U.S. We expect this will lead to easier U.S. pork exports. For several months in mid-2022, the U.S. price was higher than Spain’s. U.S. pork export sales a week ago were 33,000 tonnes.
  • Mexico Hog Price last week was 44.23 Pesos/kg. U.S. live hog price equivalency $1.06 U.S. lb. The spread between U.S. and Mexico is well over $100 per head. Mexico will continue to be the dominant U.S. pork export market. Indeed, you wonder at this price difference why even more Pork isn’t going to Mexico.
  • There is a belief that producing Pork that has better eating attributes leads to a higher cost of production due to higher feed conversion. At Genesus we hear that all the time from industry and competitors. We believe that the cost of gain is what matters not just feed conversion as a standalone trait. To find a solution we did massive feed trials and had the results reviewed by the Kansas State Nutrition team. The result is the higher appetite of Genesus pigs not only leads to faster growth and less mortality but the ability to use feed that costs less per ton.
  • Genesus rations currently are $13.37 per ton in average finisher diet savings for (55-290 lbs.) Genesus pigs compared to those of PIC pigs. $7.21 per ton is the current finisher diet savings for Genesus pigs compared to DNA pigs. $15.42 per ton is the current finisher diet savings for Genesus pigs compared to those of Topigs Norsvin pigs.

Click on the link below for the Kansas State University Nutrition team lysine calculator for Genesus Grow-Finish Pigs:

KSU Lysine Calculator for Genesus Grow-Finish Pigs