According to the USDA's April Livestock, Dairy and Poultry report, the Quarterly Hogs and Pigs report released by USDA on March 25th offered a mixed perspective of U.S. hog production. The report showed a slightly higher March 1st inventory of all hogs and pigs.
The market hog component of the inventory was almost 1 percent larger than a year ago. With all other factors unchanged, slightly higher market hog numbers could be expected to have a dampening effect on hog prices. But it is more likely that expected strong domestic and foreign pork demand will offset any downside price effects of higher market hog inventories.
The report also indicated that producers intend to farrow about 3 percent fewer female breeding animals in both the spring (March-May) and summer (June- August) quarters of this year.
Even if producers follow through with their stated intentions, it is likely that continued gains in pigs per litter will limit production effects of lower farrowings.
Productivity gains are thus expected to combine with lower stated intentions to yield a spring pig crop only slightly smaller than a year ago. Lower summer farrowings are expected to be more than offset by continued gains in seasonally high litter rates, and thus to result in a marginally higher summer pig crop.
Commercial hog production this year is expected to be 22.6 billion pounds, slightly higher than last year. Second-quarter production is expected to come in at 5.35 billion pounds, almost 1 percent above the same period last year. Live equivalent prices of 51-52 percent lean hogs are expected to be $62-$65 per cwt this year, more than 15 percent above 2010 prices.
For the second quarter, the expected price of $67-$69 is more than 14 percent above the same period last year.
Source: Livestock, Dairy and Poultry report