Several weeks ago I wrote about my thoughts regarding the future direction of slaughter weights in the US. As most of you will recall, the data suggests heavier weights in future years, even as we hear of packer concerns regarding very large resulting meat products (bone-in hams, boneless and bone-in loins, etc.).
This past week I’ve been working on a presentation for an upcoming meeting and have been digging into the USDA data even deeper. From 1977 thru 2012 federally inspected carcass weight has increased 1.27 pounds per year with an R2 correlation of 0.985. While the final data hasn’t been released, my daily monitoring of the carcass weights reported by mandatory price reporting (LM_HG201) suggests the average federally inspected barrow and gilt carcass weight for 2014 will be 214.x lb – up over 10 lb from the 203 lb average in 2012.
While most observers (including me) expect 2015 to have lower carcass weights than 2014, there is no reason to expect them to drop below the trend line average of 207 predicted for 2015.
Of more interest to me as I worked with the data set is the correlation of increased numbers of barrows and gilts slaughtered by year since 1977. As US producers grew their export markets and US consumers (including retail buyers) decreased their imports, the total numbers of barrows and gilts slaughtered has grown in a linear manner. The number of barrows and gilts slaughtered under federal inspection grew on average 1.069 million head per year, with an R2 correlation of 0.883.
The decline in 2014 due to PEDv appears to have been a 1 time event, similar to the spike in 2007 due to the very effective introduction of the circovirus vaccine. It appears that production numbers this year will put us back near the trend line suggesting about 112 million barrows and gilts slaughtered.
There is a lot of concern about slaughter capacity beginning this fall and into 2016. Hatfield’s have announced a new 10,000 hd/d single shift plant for Coldwater, MI which is scheduled to open in 2017. There are currently 13 US plants that slaughter 7,500-11,000 head per day in a single shift. The most notable are 6 Smithfield plants (Crete, NE; Denison, IA; Milan, MO; Monmouth, IL; Clinton, NC; Gwaltney, VA), 3 Tyson plants (Madison, NE; Perry, IA; Columbus Junction, IA), JBS Swift (Louisville,KY), Hormel (Fremont, NE and Los Angeles, CA) and Hatfield Quality Meats (Hatfield, PA).
When you do the math, it takes about 2.5 million pigs per year to fill a 10,000 head kill shift at a slaughter plant. This becomes important as we look to the projected slaughter capacity needs in 2025.
Based on a trend line increase of 1.069 million head slaughtered per year, the US is adding a single shift kill at a slaughter plant every 2.5 years to our capacity needs. Based on 108.9 million head killed in 2012 and assuming trend line continuation, the US will need capacity to slaughter 117.5 million barrows and gilts in 2025. How much of the increase in slaughter capacity comes from adding cooler capacity and a second kill shift at existing plants and how much comes from new plant construction is of vital interest to all producers.