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U.S. hog market “a wreck”

chicago / reuters / Record-high feed costs caused by the worst drought in half a century are forcing U.S. farmers to slaughter more of their hogs, with the number reaching 9.9 million head in August.

With the pace of slaughter set to increase seasonally in the fourth quarter, the country could be awash with pork. That would push prices of hog futures, already near 20-month lows, even 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 of the Livestock Marketing Information Center in Denver.

“Feedstuff costs are high and hog prices are headed lower.”

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