The US is still short of so many slaughter hooks

America is full of pigs. Pig farmers have imposed and expanded considerably due to good earnings in 2014. The pig population has increased by more than 4 percent compared to last year. Despite US slaughterhouses expanding, slaughter hooks are likely to remain scarce.

America recorded a slaughter record with 46 slaughtered pigs last November in week 2.531.000. That was about 200.000 more slaughter than the five-year average for that period. Slaughter capacity was then expanded on all sides to be able to process these numbers. According to Len Steiner, an analyst with the CME group, slaughterhouses were actually short of 90.000 slaughter hooks in that week.

Due to the enormous size of the pig population, several slaughterhouses have plans to expand. In the states of Iowa, Minnesota and Michigan, the slaughter capacity will be expanded by approximately 138.000 places. New factories are expected to become operational in the fall. This probably relieves the pressure somewhat. According to Steiner, America is still short of 50.000 slaughter hooks, even with the extra slaughter capacity. The analyst is referring to the huge size of the pig herd that the USDA (the United States Department of Agriculture) counted in March.

Pig price forecast
Normally, the number of slaughters decreases somewhat in the summer months. In the third and fourth quarters, the supply of pigs generally increases again. As a result, the slaughter figures are rising rapidly. Given the increasing number of sow litters and the record number of young pigs in the pipeline, supply is expected to peak again by the end of the year.

Based on the expected supply and current sales opportunities, Steiner expects an average pig price of around $1,60 per kilo. For the fourth quarter, he expects revenues to be around $1,40 per kilo. Currently, at the beginning of April, the Iowa/Minnesota quote is still at $1,35 per kilo.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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