While some production growth was shown in the March quarterly pig crop report, the overall outlook is positive for pork producers.
That seems like a contradiction, but based on the past six weeks of slaughter, USDA had to lower projections by more than 500,000 head. Also, the December/ February pig crop report had about 700,000 fewer pigs than expected from USDA’s new monthly reports, raising questions about the reliability of the monthly reports.
All hogs and pigs were up 2 percent from a year ago, while the breeding herd showed a modest 1 percent increase. The monthly reports suggested a 3.3 percent increase over 2000 was in the cards for the quarterly report.
Most of the growth came in the Eastern Corn Belt, with Minnesota showing a 5 percent increase in the breeding herd. Iowa declined, while North Carolina remained unchanged from a year ago.
“This is not new growth,” says Chris Hurt, Purdue University agricultural economist. “The report tells us moderate-sized operations that cut back previously are coming back to capacity.”
Adding to the bearish report is the opportunity for the United States to grab more export dollars, due to the foot-and-mouth disease problems in Europe. Hurt believes the market has an extra $2 to $4 per hundredweight built in due to increased export sales. Hurt’s market projections look like this:
|Spring||high $40’s to low $50’s|