On Dec. 30, USDA will release the results of their latest survey of the U.S. swine inventory. My estimates are that the breeding herd is 2.7 percent smaller than a year ago; the market hog inventory is 3.0 percent smaller; and the total herd is 2.9 percent smaller than on Dec. 1, 2008.

My estimates of the Dec. 1 market hog inventory by weight groups are: 180 pounds and heavier 97.1 percent, 120-179 pounds 96.2 percent, 50-119 pounds 96.4 percent, and under 50 pounds 97.9 percent of a year earlier.

Slaughter of barrows and gilts was down 1.0 percent during Sept.-Nov. due in large part to a 34 percent drop in slaughter hog imports from Canada. Slaughter of U.S. raised barrows and gilts was about 0.4 percent higher than implied by the September inventory report.

In their last inventory report, USDA predicted that both Sept.-Nov. farrowings and Dec.-Feb. farrowings would be 3.1 percent smaller than a year earlier. I'm in agreement that fall farrowings were down 3.1 percent. I am forecasting winter farrowings will be down 3.0 percent and spring farrowings to be down 2.0 percent compared to March-May 2009. Despite a lot of red ink, 2009 sow slaughter has been low. March-May sow slaughter was down 14.9 percent June-Aug. was down 4.6 percent, and Sept.-Nov. was down 1.7 percent  compared to 12 months earlier.

I believe pigs per litter were up 1.9 percent this fall. My estimate is the Sept.-Nov. pig crop was 98.7 percent of a year earlier. Feeder pig imports during Sept.-Nov. were 21.6 percent below last fall's level, so the light weight inventory should be down more than the pig crop.

My estimate of hogs in the 50-179 weight groups implies that first quarter hog slaughter will be roughly 4 percent below year-ago levels, if as expected, the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $48.50 per hundredweight ($64 per hundredweight carcass) in the first quarter of 2010.

I expect hog slaughter during the second quarter of 2010 to be 2 percent to 3 percent lower than the number slaughtered in April-June 2009. If so, second quarter 2010 hog prices should average close to $50.50 per hundredweight on a live basis and $67 per hundredweight on a carcass basis.

Source: University of Missouri