The U.S. Department of Agriculture has significantly increased its 2017 pork production outlook, expecting 3.8 percent more pork next year than the record amount of 24.928 billion pounds produced in 2016.
The 2017 live hog prices forecast was also reduced by $2.50/cwt to $39-$43/cwt.
According to pork market analyst Len Steiner, 2017 pork output is now expected to be 25.881 billion pounds, 953 million pounds (+3.8 percent) more than in 2016 and 2.8 billion pounds (+12.4 percent) more than what was seen on average from 2011 to 2014.
The analysts make note that while current prices may appear quite low compared to what was seen a couple of years ago, one needs to consider how dramatic the increase in total production has been and will be in the next 12 months.
In other pork news, market analyst Ron Plain said that Hurricane Matthew disrupted hog slaughter on the east coast of the U.S. as Smithfield was forced to close its North Carolina operations.
As a result, last week’s weekly hog slaughter was down 118,000 head from the previous week, with hog slaughter totaling 2.304 million head.
The reduced hog slaughter was positive for cutout values. Friday’s pork cutout value was $73.59/cwt FOB slaughter plants. That is up $1.46 from the week before.
Slaughter levels are now expected to be higher in the coming weeks in order to process the extra pigs.
In disease news, African Swine Fever outbreaks have been reported in pig herds in Ukraine and Russia.
It’s my understanding from here and other sources that hog production is going to be too high this coming year for the processing plants to keep up with. Knowing this, why in the world is Big Ag trying to build even more CAFOs? If you are going to erect hog confinements every quarter-mile and poison my drinking water with pig poo, you can at least bring the price of bacon down to $1.50 a pound again.