USDA’s September hogs and pigs report said the breeding herd was 0.6% larger than a year ago and the market hog inventory was up 1% compared to September 1, 2010. Record hog prices this summer appear to have put some hog producers in an expansionary mood.

Litters farrowed during June-August were down 1.5%, but because pigs per litter were up 2.2%, the summer pig crop was up 0.7%. USDA is predicting the number of sows to farrow this fall will be down 0.2% and they predict December-February farrowings will be 0.5% higher than a year earlier. If the number of sows that farrow this winter is above the year-ago level, it will be the first time since March-May 2008. I am predicting 2012 hog slaughter at 112 million head, up 1.6% from this year.

USDA said the number of pigs weighing 180 pounds or more on September 1 was up 3.4%. It looks like September hog slaughter will total about 3.7% more than last year. The September survey put the inventory of hogs weighing 120 to 179 pounds at 100.7% of last year, and the number of market hogs weighing less than 120 pounds at 100.4% of last year.

All the key report numbers were higher than the average of the pre-release trade forecast, yet the futures market held steady to higher this week. Either this indicates traders don’t agree with the pre-release forecasts or are optimistic about meat demand. China appears to be buying a lot of U.S. pork.

Today’s close for the October lean hog futures contract, $93.37/cwt, was up $4.58 from last Friday. The December lean hog futures contract settled at $87.80/cwt, up $4.08 from the previous Friday. February gained $3.66 this week to settle at $91.57/cwt.

The pork cutout value rose for the third week in a row. USDA’s Thursday afternoon calculated pork cutout value was $98.08/cwt, up 57 cents from the previous Thursday. Loins and butts were lower, hams and bellies were higher.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $87.34/cwt, up $2.47 from last Friday. The Friday morning price report for the western corn belt was $90.65/cwt. Iowa-Minnesota averaged $90.68/cwt. Eastern corn belt barrows and gilts averaged $84.10/cwt of carcass, far below the western corn belt for the fourth week. Friday’s top live hog price at Peoria was $60/cwt. Zumbrota’s top was also $60/cwt. The top for interior Missouri live hogs was $63.75/cwt, unchanged from the previous Friday.

Hog slaughter totaled 2.25 million head this week, down 1.7% from last week, but up 4.7% compared to the same week last year. Barrow and gilt carcass weights for the week ending September 17 averaged 199 pounds, unchanged from the week before and unchanged from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 270 pounds, up 1.6 pounds from the week before and up 0.2 pounds compared to the same week last year. This is the first week Iowa-Minnesota weights have been above the year-earlier level since May.