For the three weeks in March (weeks ending 4, 11, 18 March) slaughter has averaged 2.323 million head, 4.8 per cent higher than a year ago and now in line with what was implied in the December Hogs and Pigs report.

There is a lot of interest in the industry about the implications of the March survey, with the results expected to be released 30 March.

Particularly interesting will be the outlook for pork supplies going into the summer months. Expectations all along have been that we should expect a notable increase in slaughter but the timing of that supply will be critical.

Seasonally hog numbers decline in May, June and July and that will be the case again this year. The question, however, is whether weekly hog slaughter remains above the 2.2MM per week after Memorial Day and how able the market will be to absorb this supply.

So far it is clear that exports have provided the much needed demand impetus and limited the supply of pork going into domestic channels. Higher beef prices and continued pork export growth remain positive factors for the pork market but they also present inherent risks for producers.

As for the hog supply expansion, all eyes will be on the size of the breeding herd. So far futures continue to provide producers an incentive to stay on the growth path.

More packing capacity expected to come online later this year also should provide some relief in terms of processing all the additional hogs. However, the focus will be on the pace of that growth or if supply expansion continues to outpace the growth in packing capacity.