USDA’s latest release of the Quarterly Hogs and Pigs report showed June 1 inventories of breeding animals and market hogs largely unchanged from a year ago. June 1st breeding animal numbers were 5.882 million head vs. 5.862 million head a year earlier, and for market hogs, the report showed an inventory of 60.765 million head on June 1 vs. 60.797 million head a year ago.

The March-May farrowings came in at 2.921 million litters, more than 2 percent below farrowing in the same period last year. These 2013 spring farrowings are noteworthy for several reasons. First, while farrowing intentions for spring 2013, reported in December 2012 and March 2013, were each lower than a year earlier, the intentions published in March indicated that producers expected to farrow only 1 percent fewer sows than a year ago. As a result, the 2 percent lower actual farrowings reported in June were something of a surprise for the industry. A published poll of industry analysts showed average expectations for 2013 March- May farrowings at 99.1 percent of spring farrowings in 2012. http://www.dailylivestockreport.com/documents/DLR%2006-27-2013.pdf

It is also worth noting that the March-May farrowings reported in June, as a proportion of the March 1 breeding inventory, are somewhat lower than a year ago. This year, 50.1 percent of the March 1 breeding herd farrowed in the March-May quarter; last year, that proportion was 51.2 percent. The 3- and 5-year averages are, respectively, 50.8 percent and 50.4 percent.

Why are pork producers appearing to allow productive capital (their sow herds) to remain less productive than a year ago? It could be that for some producers, the configuration of expected high summer cash feed costs and expected hog prices do not provide sufficient incentive to push hard on their breeding herds, i.e., to reduce the time between farrowing, weaning, and re-breeding.

The foregoing discussion is largely rendered moot, however, by the record-high litter rates that were reported for the spring pig crop in the June report. The reported litter rate for the March-May pig crop was 10.31 pigs per litter, the highest ever achieved by the U.S. pork industry. So while farrowings were lower than expected, the sky-high litter rate more than offset the fact that fewer sows farrowed. The 2013 spring pig crop, 30.111 million animals, is slightly ahead of the 2012 spring pig crop of 30.077 million pigs. Higher spring litter rates are likely largely attributable to much-improved genetics and to better sow barn management. The fact that the breeding herd was not being pushed to maximize production—as suggested by the lower farrowing-to-breeding herd ratio—may also have contributed to the record-high litter rate.

On the basis of the June report, USDA adjusted fourth-quarter 2013 pork production, to 6.4 billion pounds, 2.9 percent higher than a year earlier. Fourthquarter prices of live equivalent 51-52 percent lean hogs are expected to average $55 and $59 per cwt. For the current quarter, U.S. commercial pork production is forecast at 5.7 billion pounds, an increase of 1 percent over the same period a year ago. Third-quarter hog prices are expected to average $65 and $67 per cwt.