ERS attributes feed costs, PRRS and economic uncertainty for producers marketing animals earlier in 2023.

Ann Hess, Content Director

March 16, 2023

3 Min Read
Loading market hogs onto a semi trailer
NPB

U.S. pork processors harvested fractionally more hogs last month than in February 2022, but overall produced less pork. Federally inspected hog slaughter for February 2023 was 0.4% higher than a year ago, at 9.9 million head; while estimated FI pork production, at 2.16 billion pounds, was down 0.2% from the year prior.

According to the USDA Economic Research Service's Livestock, Dairy, and Poultry Outlook for March 2023, the contributing variable for these figures was dressed weights, with February 2023 weights down nearly 1.4 pounds from February 2022.

"While average dressed weights began 2023 at above year-earlier weights, they have trended lower since," states USDA ERS Agricultural Economist Mildred Haley. "Among the most important variables driving producers to market animals earlier are feed costs, disease losses and uncertainty about the continued strength of consumer pork demand."

Prior to COVID (2017-2019), feed costs were relatively moderate, with farm corn prices averaging $3.53 per bushel and high protein soybean meal averaging $322.22 per ton. Hog dressed weights during this three-year period averaged 212 pounds per head.

USDA NASS AMS Weekly Avg Dressed Weights.JPG

As the U.S. economy bounced back in 2021, demand for pork increased as consumers were now familiar with preparing pork at-home from the 2020 lockdown. Besides increased consumer demand, pork processing recovery and lower production set the stage for increased hog prices in 2021. Dressed weights during this time averaged almost 214.7 pounds, even with higher feed costs.

Haley points out much of last year was a repeat of 2021 for the U.S. pork industry.

"In 2022 lower production combined with strong consumer demand to drive hog prices to year-over-year higher levels, largely compensating producers for increased costs of adding weight to hogs," Haley states.

Even with 2022 average corn prices 25% higher and high protein soybean meal 20% higher than 2021, it wasn't until the end of 2022 that average dressed weights dropped. High inflation, high interest rates, general economic uncertainly and negative producer returns in November and December are all factors to consider as producers started marketing hogs faster, Haley notes.

For example, fourth quarter 2022 FI dressed weights averaged around 215 pounds, a 0.2% drop from the 216 pounds per head a year prior.

In the ERS outlook report, Haley acknowledges a surge in disease may have also played a role in the lower dressed weights. Porcine reproductive and respiratory syndrome became more widespread in 2022, with an uptick in the strain, Lineage 1C RFLP 1-2-4. According to the Swine Health Information Center Domestic Swine Disease Monitoring report, hight activity of PRRS L1C 1-2-4 was first reported in August, and continued to increase, with 264 sequences in 2022, more than 62.7% of the total number of sequences detected from 2009 to 2021 (n= 421). 

In 2021, the strain was detected in the Midwest and west Mississippi river states, and in 2022 some detections also occurred in the east Mississippi states, with detections in Illinois, Indiana and Ohio.  Since November 2022, it has been increasing with the number of detections in Iowa, and the East Mississippi states, raising concern about the ongoing winter season.

"It is possible that a contributing factor to continuing lower-trending dressed weights that became more evident last year was producers who—under contract to deliver hogs to processors—were forced to pull forward and deliver lighter-weight hogs after having lost heavier finisher animals to PRRS," Haley states.

With lower-than-expected dressed weights likely to persist through the first half of 2023, first quarter pork production estimates have been reduced by about 10 million pounds, still 1.4% higher than first quarter 2022.

According the ERS Outlook Report, 2023 production is expected to reach 27.4 billion pounds, 1.5% higher than the year prior.

About the Author(s)

Ann Hess

Content Director, National Hog Farmer

Subscribe to Our Newsletters
National Hog Farmer is the source for hog production, management and market news

You May Also Like