USDA's quarterly December Hogs and Pigs Report showed both the breeding herd and market herd were 1 percent below December 2000 levels. These numbers were somewhat smaller than the average trade estimates, which sheds a more positive light onto the numbers.

The breeding inventory on Dec. 1, was 6.21 million head and the market inventory was 52.6 million head. This put total U.S. inventories at 58.8 million head.

There is some cautiousness among market analysts concerning USDA's December numbers.

Hog slaughter during December was 4 percent higher than expected, according to Glenn Grimes and Ron Plain, University of Missouri agricultural economists. Some of that could be a result of unseasonably warm temperatures that kept hogs growing at a record pace. Last year also presented many delays and transportation problems as December saw large amounts of snow falling across the Midwest. The proof will be in found in slaughter runs and market hog weights as we enter the new year.

Looking ahead, farrowing intentions for December 2001/February 2002 are pegged to be 3 percent higher than those of December 2000/February 2001, even though the breeding herd is down 1 percent. The discrepancy in those two percentages suggests one of them is wrong. For March/May, the farrowing intentions are targeted for a 1 percent increase over that same period in 2001. Sows farrowing from September to November 2001 totaled 2.85 million head, slightly above last year.

Current data shows substantial swings in productivity growth from year to year and the swings have been particularly wide for the past year, say Grimes and Plain. However, a portion of the changes in productivity growth may be errors in the size of the breeding herd and pig crop, say the Missouri economists.

Plain is not surprised by the continued lack of expansion among U.S. pork producers. He points to environmental factors as a significant deterrent. Between new Confinement Animal Feeding Operation regulations coming down the pike and lenders apprehension to fund facilities, "it is not a very attractive time to be building a unit," says Plain. "I expect this to
continue for some time."

Live-hog prices in 2002 are expected to be similar to 2001. Grimes and Plain expect slaughter-hog numbers to be about 98.5 million head and prices to average $41 to $43 for live hogs in 2002. Here are their quarterly price projections.

Qtr. Slaughter Terminal Market
(million head) Barrows and Gilts
head) (price per cwt.)
1st 24.3 $39-$42
2nd 23.1 $46-$49
3rd 24.3 $41-$44
4th 26.7 $32-$35

USDA, Glenn Grimes and Ron Plain, University of Missouri agricultural economists