* Ramped up slaughter adds to swollen supplies
* Costly feed fuels increased hog slaughter
* Pork supply less than forecast, may support futures
* Pork price hikes inevitable for shoppers in 2013
(Adds details, analysts' comments)
By Theopolis Waters
Nov 21 (Reuters) - Pork supplies in U.S. warehouses in
October were the highest ever for that month, a government
report showed on Wednesday, the result of increased production
as farmers rushed hogs to slaughter plants due to high feed
costs.
That rush to sell hogs could result in fewer hogs, less pork
and higher supermarket pork prices in 2013, analysts said.
The U.S. Agriculture Department on Wednesday reported
end-of-October pork stocks at 606.2 million pounds, down 4
percent from September, but up 24 percent from a year earlier.
That eclipsed the previous record for the month of 528 million
lbs in 2008 and marked the sixth straight monthly record.
But inventories fell short of the average trade forecast of
632.5 million lbs, which could lend to the recent positive tone
in Chicago Mercantile Exchange hog futures on Friday. CME
futures markets will be closed on Thursday for the U.S.
Thanksgiving holiday.
"Even with record pork production, the data suggests
clearance from freezers was outstanding, which gives impetus to
a big export program in October," said independent livestock
market analyst Bob Brown.
Allendale chief strategist Rich Nelson pointed out that the
24-million-lb decline in pork stocks from September to October
was the most ever for that time frame.
While domestic demand for pork last month may have been
lackluster, exports grew from January through September which
likely helped drawdown inventories going into October, he said.
USDA data shows year-to-date pork exports through September
at nearly 4 billion lbs, up about 8 percent from a year earlier.
HOG MARKETINGS SURGE
Analysts estimated the hog slaughter in October at about
10.774 million head, which would surpass the previous all-time
high for any month of 10.654 million set in October 2008. USDA
will publish its official slaughter numbers for October on
Friday.
Hog sales typically increase during the fall. But this year
producers appeared to sell more than normal in reaction to high
feed costs. The historic drought last summer parched pastures,
hurt crops, and reduced grain production.
Hams in freezers last month for Thanksgiving and
winter-holiday use were down 12.6 percent from September but up
nearly 40 percent from last year.
Analysts said the potentially record-large hog slaughter
last month may have reduced the need by end-users to draw more
frozen hams from storage this year.
Stocks of pork bellies at 19.124 million lbs were up 22
percent from September. That was up 119 percent from an
unusually small supply in October 2011.
The prospect of fewer hogs and less pork next year should
drive up pork prices then.
"There is no doubt (pork) prices will be going higher and
consumers could see as much as a 5 percent year-over-year
increase in retail prices during the summer," said Nelson.
December CME hog futures closed up 0.100 cent per
lb at 81.750 cents in pit trading, and were up 0.175 cent at
81.825 cents in later electronic trading.
(Reporting By Theopolis Waters. Editing by Andre Grenon and Bob
Burgdorfer)
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