US Market Price Decline is Painful

If you’re a US producer selling slaughter pigs, you have felt a lot of pain the past 2 weeks as live prices have collapsed. Since many of the readers of this blog are located in other countries or serve in industry support roles where they don’t have daily market contact, I thought I would work the numbers today.

The National Daily Direct Hog Prior Day Report (LM_HG201) reported that 402,770 barrows and gilts slaughtered under federal inspection on Thursday, October 22 averaged 212.17 lb carcass weight. The weighted average net price paid at the slaughter plant that day was $73.90 per 100 lb of carcass weight. This means the weighted average net price paid per pig was $157.79.

Yesterday USDA reported 402,268 barrows and gilts slaughtered under federal inspection with an average carcass weight of 214.08 lb. While the pigs were 2 lb heavier than 2 weeks ago, the weighted average net price paid at the slaughter plant was only $64.54. This made the value of the 2 lb heavier carcass only $138.17, a $19.62 per pig decline in 14 days.

Yes, producers always expect a price decline in the fall as numbers and weights increase. However, a $20 change in price received per pig in just 14 days is still painful.

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