The March USDA Hogs and Pigs Report showed very few surprises. This means liquidation is continuing and hog prices should peak this summer.

U.S. inventory of all hogs and pigs on March 1, 2003 was 58.1 million head, down 2 percent from March 1, 2002 and 2 percent from Dec. 1, 2002. Breeding inventory at 5.96 million head was down 4 percent from March 1, 2002, and down 1 percent from last quarter. Market hog inventory, at 52.2 million head, was 2 percent below March 2002 levels and 3 percent below last quarter.

James Mintert, Kansas State University economist, says there were no big surprises in USDA’s March Hogs and Pigs report, so there should be little reaction in the futures and cash markets. He pointed out that revisions to USDA’s September report helped account for some of the larger slaughter numbers lately. Mintert sees hog slaughter for 2003 coming in a little over 98 million head, which is down 2-2.5 percent from 2002.

Mintert’s price projections for the rest of the year are:

Qtr. – USDA National Base carcass price ($/cwt.)
2 – upper $40s – low $50s
3 – low $50s- mid $50s
4 – upper $40s- low $50s

Ron Gietz, vice president pork industry for the Sparks Companies, says while the numbers were close to expectations, nearly every category came in on the low side of  expectations, making the report slightly bullish. Gietz thinks this is a good report, but that the revisions to the September report have just pushed the good news further down the road. He expects prices to be strong in the summer in a sharp contrast to last year’s summer price drop.

Here are Gietz’s price projections for the remainder of the year:

Qtr. – Net carcass price ($/ cwt.)
2 – mid $50s – upper $50s
3 – low $60s- med $60s
4 – mid $50s