Grains stocks and slaughter capacity

This week I’ve spent quite a bit of time in my office working on presentations for upcoming meetings. I’ve also been working on papers for proceedings of meetings to be held several months from now and digging into the research literature on several production topics. After several months of hectic site visits, research involvement and meetings I sometimes find it difficult to slow down enough to plan for future events with new ways of looking at old problems.

While I know this time spent in the office is valuable long-term, it’s hard to just sit and think. I suspect many of the readers of this blog are similar to me – they would rather ‘do’ than ‘think’. Yet, without ‘thinking’ the ‘doing’ may be done incorrectly.

With the release of yesterday’ USDA grain stocks report a lot of ‘thinking’ will be necessary to make it to next summer/fall as regards feed ingredients. The picture on both availability of feed ingredients and the price of the available ingredients continues to be murky at best.

I continue to speak with clients about expanding their horizons regarding feed ingredient options. If you are located in an area near wheat production, don’t rule out feeding of wheat, especially mid-summer next year. While we don’t know what the price of soft red winter wheat will be in Indiana, Ohio and Illinois next June, the availability of this commodity may make it an option for many diets.

In the western corn belt, hard red winter wheat will be the key alternative ingredient for many producers next summer to stretch limited corn and soybean meal supplies.

With tight feed ingredient supplies I am getting a lot of questions on producer plans for next year. A lot of ‘ifs’ on my reply. Will 2013 be the second year of drought or will we get enough moisture to have something near normal supplies? Will producers return to expansion mode next year if feed grain supplies return to more normal prices and supply levels?

If we return to expansion thinking, will there be enough slaughter capacity in 2014 to kill the pigs? As we learned this fall, we are producing pigs at a level that is near the daily US slaughter capacity. Record numbers of pigs came to market in September as producers struggled to lower sale weights in response to high feed ingredient prices. I was with field men for production systems on many days who were almost begging packers to accept another load of pigs. While we weren’t at the level of oversupply relative to slaughter capacity that we had in the fall of 1998, it was closer than many were comfortable with. If something would have happened to a plant that kills 15,000 or more per day, where would we have gone with those pigs? At 436,000+ per day federally inspected kill on many days since September 1, we were very near to system capacity, with the only option being a full Saturday kill and maybe an occasional Sunday kill, which is what happened in the fall of 1998.

One thought on “Grains stocks and slaughter capacity

  1. Slaughter capacity is really the BIG issue! I don’t know when the data was collected for latest SF Pork Powerhouses but if accurate we are going to have issues with shackle space. Huge “ifs” in this industry. More $’s at stake than ever.
    Always enjoy your comments.

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