News

Backlog of hogs could pressure prices even more in the fourth quarter

Analysts are still unsure just how many hogs are backlogged in the supply chain following the processing plant slowdown and shutdowns as a result of the coronavirus pandemic.

Steve Meyer with Partners for Production Agriculture says by his calculations he has 1.46 million head backed-up based on the June Hogs and Pigs survey.  “They are not accounted for in slaughter,” he says.  “If they were growing at normal weights and if we had had packing space to get them slaughtered.” 

Economist Kevin Bost with Illinois-based Procurement Strategies says there’s potential for the backlog to grow significantly over the final quarter of the year.  “They’re backed up because growth rates have been slowed down,” he says.  “So at what point to producers at a large scale change that and start speeding up the growth rates and bringing them back to normal?  If these numbers are correct, if it does, then we have a big catharsis coming.”

Meyer says if the backlog grows significantly in the final quarter of the year, the processing industry won’t be able to really work through it until the first part of 2021.

Hog slaughter capacity is typically under the most pressure during the final quarter of the year. 

Meyer and Bost made their comments during a recent webinar hosted by the National Pork Board to analyze the latest Hogs and Pigs report from the USDA.