Losses continue in July for pork industry

July data indicated a loss of $13.50 per head, according to estimated returns for a wean-to-finish hog operation from Iowa State University.

While the numbers are down, it is still an improvement from June, which posted a loss of $30.76 per head. A year ago, the industry was profitable by $70.41 per head.

An analysis by the Livestock Marketing Information Center indicates that weekly sow slaughter has been trending higher than a year ago by about 7,400 head per week. During that time, most weeks had weekly levels in the mid-60,000 head area, with a couple of weeks approaching 70,000 head.

July’s total feed costs were down by 7.7% from a year ago, to $108.70 per head, which is due partly to a 14.8% ($9.29 per head) decline in corn feed costs.

“Iowa State University’s estimated returns assume a market hog sold in July was purchased as a feeder pig back in January, which was at a price of $63.26 per head at that time,” LMIC said. “During December to about February is when feeder pig prices seasonally peak as these pigs will typically be marketed during the summer grilling season from about June through August.

“Feeder pig prices continue to track seasonally lower with last week’s early weaned (10-12 lbs.) feeder pig price at $17.94 per head and 40 lbs. feeder pigs at $23.97 per head. Based on the seasonal pattern, feeder pig prices should start to see improvement in the coming weeks.”

Last year during June and July, weekly sow slaughter averaged about 58,000 head per week.

“The elevated sow slaughter levels could be reflective of the limited profitability in the hog industry,” LMIC said. “If higher sow slaughter levels continue, this will likely lead to lower farrowings in the near term.

“The June USDA NASS Hogs and Pigs Report has June-to-August and September-to-November farrowing intentions down 3.6% and 4.4%, respectively, to 2.942 and 2.953 million head.”

LMIC said this would lead to lower market hog supplies during the first half of next year.