U.S. hog slaughter in July was 5.7 percent above 2011, though 3.2 percent below the three-year average July sow slaughter and 8.4 percent below the five-year average, suggesting that producers might not be unloading their stock due to feed prices as quickly as analysts had predicted.

Weekly sow slaughter for the weeks ending August 4 through September 1 shows slaughter to be less than 5 percent above comparable weeks in 2011. It is possible, however, that higher sow prices induced larger August slaughter numbers, according to the U.S. Department of Agriculture. After moving lower through July, sow prices in August may have bottomed out and could be turning upward, averaging $41.78 per cwt. Higher sow prices in August suggest that pressure from large supplies of sows may have eased. If a large-scale liquidation was underway, it is unlikely that prices would have bottomed out as they did in August, said the USDA. Moderate summer sow slaughter suggests a scenario in which, despite record-high prices for corn and soybean meal, the current price environment will persist through only the 2012–2013 crop year.

Fourth-quarter 2012 pork production is expected to be almost 6.3 billion pounds, 1.6 percent greater than in the same period in 2011. Estimated dressed weights in the fourth quarter will likely continue to run just slightly ahead of 2011 weights. In 2013, however, record-high feed costs are expected to gain traction, and pull dressed weights in the first three quarters below those of the same period of 2012, as producers push to minimize feed costs while avoiding packer discounts for low-weight animals, according to the USDA. Prices of live equivalent 51-52 percent lean hogs are expected to average $57–$59 per cwt. in the fourth quarter, more than 10 percent below 2011 numbers, and $60–$66 per cwt. in the first quarter of 2013.