As should be expected, the long string of losses is causing a reduction in the sow herd. According to USDA’s September Hogs & Pigs Report, the U.S. breeding herd at 5.874 million head is down 5.8 percent from the December 2007 peak. Many analysts predict a 10 percent reduction in sow numbers will be needed to return pork production to profitability. Given the huge losses, bankers are expected to force producers to accelerate the rate of cuts.
The herd reduction has been longer and deeper in Canada. The Canadians have cut their breeding herd for 19 consecutive quarters. Canada’s sow herd is 15 percent below its last inventory peak in January 2005.