While USDA’s March Hogs and Pigs report may have been light on surprises, the third quarter farrowing intentions, surprised some economists. University of Missouri agricultural economists Ron Plain and Glenn Grimes said that with nearly 3 percent annual productivity growth for the past five years, it is likely the third quarter farrowings will be larger than the 1 percent decline this report indicates.
The first quarter 2005 pig crop was estimated by USDA to be up 1.5 percent from a year earlier. However, the under 60 pound market inventories were the same as a year ago. This seemed reasonable to Grimes and Plain because of the smaller number of feeder pigs imported from Canada.
Slaughter for the first three weeks of March has been a little smaller than indicated by the report’s March 1 inventory for 180 pound and heavier market hogs.
A preliminary estimate of live hog demand for the first quarter of 2005 shows a 3 percent to 5 percent increase above the strong growth of 2004. Export demand looks to continue to be very strong in 2005, as well.
Here are the MU economists price projections for the remainder of 2005 and early 2006:
Quarter Slaughter Terminal 51-52% Mkt Lean Hogs (mil. Hd) ($) ($) Q2 2005 25.1 48-51 51-54 Q3 2005 25.8 47-50 50-53 Q4 2005 27.2 44-47 47-50 Q1 2006 25.8 45-48 48-51