The February Hogs and Pigs Report was above expectations, although many analysts are cautious to make predictions on the monthly reports’ accuracy this early in the process.

The January pig crop, reported on Feb. 1, was 8.35 million pigs, which is 6 percent above year ago levels, and 1.3 percent above levels reported on Jan. 1. Expectations were for a 3.2 percent to 5.6 percent increase over year-ago levels.

The number of sows farrowed in January increased from 911,000 last year to 947,000 in this report. This accounts for a 4 percent increase from a year ago. Perhaps a bigger surprise was the 8.94 pigs-per-litter average, which is a 2 percent increase from last year.

The number of animals bred in January came in at 1.169 million, very close to expectations. The breeding herd inventory on Feb. 1 exceeded expectations slightly, but the increase was less than 1 percent.

This report is bearish and implies that July slaughter could be up about 6 percent over July 2000 slaughter. This could put the price for live hogs in the mid-to-low $40-range this July, according to Ron Plain, University of Missouri agricultural economist.

While the report raises some issues, it is still only the second of the monthly USDA reports, meaning the kinks are still being worked out. When USDA first announced it would issue a monthly report, Plain said he thought the reports might be less accurate each month, but when pieced together would provide a more complete market picture than traditional quarterly reports. Since this is only the second monthly report, we don’t have the luxury of piecing together several reports for a complete picture, so perhaps this report will not be as bearish as it originally seems.