Record-high feed costs caused by the worst drought in half a century are forcing farmers to slaughter more of their hogs, with the number reaching 9.9 million head in August, the highest-ever for that month, data analyzed by Reuters showed.
The U.S. Department of Agriculture will not issue its August monthly tally until next month, but its daily slaughter data after revisions shows that 9.857 million head were killed in August, the most since 9.868 million in December 2011.
With the pace of slaughter set to increase seasonally in the fourth quarter, the country is going to be awash with pork, and prices of hog futures at the Chicago Mercantile Exchange, which are hovering around 20-month lows, could go lower.
"If we continue to go seasonally higher (slaughter) from here, as we normally do in the fourth quarter, this is going to be a much larger number than anticipated and we've got a wreck on our hands," said Jim Robb, director of the Livestock Marketing Information Center in Denver.
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