“The breeding hog inventory could even decline if margins don’t improve soon,” says Rich Pottorff, Doane Ag Services’ chief economist, regarding 2012 pork production.
USDA will provide an updated snapshot of this year’s pork production when it releases the latest quarterly pig-crop numbers on Friday, March 30. Pork Network will present the numbers at about 2:00 p.m. (CDT), followed shortly thereafter with analysis. Meanwhile, here’s a look at some of marketwatchers’ expectations ahead of the March Hogs and Pigs Report.
USDA’s numbers will reflect hogs and pigs on farms as of March 1, 2012, and expectations are that some production increases are on their way.
Dow Jones analysts look for all hogs/pigs to come in at 1.7 percent above March 1, 2011; the breeding herd up 0.3 percent and market hogs 1.8 percent higher.
Rich Pottorff, Doane Ag Services’ chief economist, agrees with the breeding herd projection at a 0.3 percent increase, but expects market hogs to be reported at 2.6 percent higher than in March 2011.
“The good weather has probably boosted the pigs saved per litter and market hog inventories are expected to continue to increase through the rest of this year,” he notes.
Regarding market hog weight groups, Dow Jones looks for the under-50-pound category to be up the most at 2.1 percent. The 50-to-119-pound as well as the 120-to-179-pound categories could be 1.9 percent higher than in 2012. For pigs exceeding 180 pounds, Dow Jones analysts predict a 1.5 percent increase.
Looking ahead, Pottorff points out, “Economic conditions for pork producers have gotten gradually worse during the month of March, with cash hog prices and futures prices declining.” While current budgets indicate returns are below break-even, but hog prices should turn higher as spring progresses, he adds.
Still, pork producers will likely be cautious about expanding. Feed-grain supplies continue to run tight and costs remain high. Despite the unseasonably warm weather across the Corn Belt, this year’s crop has a long road ahead.
Dow Jones analysts look for the March/May and June/August farrowing intentions to be up a modest 0.2 percent and 0.3 percent, respectively from 2011 levels.