On Friday March 30, USDA will release its latest survey of the U.S. swine inventory.
"My calculations indicate the breeding herd is unchanged from a year ago, the market hog inventory is 2.4 percent larger, and the total herd is 2.2 percent bigger than on March 1, 2006," says Ron Plain, University of Missouri agricultural economist. While pork producers have had good returns for the past three years, the dramatic increase in corn prices has stopped breeding herd growth, he says. U.S. sow slaughter during the December/February period was up 5.3 percent compared to last winter, despite a sow herd that was only 1.3 percent larger on Dec. 1, 2006. Slaughter sow imports from Canada were only 2 percent higher this winter than last.
In the December Hogs and Pigs Report, USDA predicted December/February farrowings would be 2.2 percent larger than a year earlier and March/May farrowings would be up 0.5 percent. "I'm estimating that winter farrowings were up 2.1 percent and agree with USDA on spring farrowings," says Plain. "My forecast is that summer farrowings will be the same as in June/August 2006."
He looks for pigs per litter this past winter to be up 0.8 percent, making the December/February pig crop 102.9 percent of a year ago. Feeder pig imports from Canada were up 4.9 percent this winter, so the lightweight-market-hog inventory should be up slightly more than the pig crop implies, he says.
Providing estimates for the March 1 market hog inventory by weight groups, Plain outlines the following:
- 180 pounds and heavier, up 3.3 percent
- 120 to 179 pounds, up 1.5 percent
- 60 to 119 pounds, up 1.5 percent
- Less than 60 pounds, up 3.1 percent
Hog slaughter ran very light in early March because of snow, but the last two weeks have been up 5.9 percent compared to last year, says Plain.
"My estimate of the number of hogs in the 60-to-179 weight groups implies that second-quarter hog slaughter will be 1.5 percent above year-ago levels, or a bit higher if the inflow of Canadian slaughter hogs continues to exceed year-ago levels. I expect live-hog prices to average close to $50 per hundredweight in the second quarter of 2007," he says.
If his estimate of the lightweight inventory is correct, third-quarter 2007 hog slaughter should be slightly more than 3 percent larger than slaughter levels of July to September 2006. "If so, look for third-quarter 2007 hog prices to average around $47 per hundredweight on a live basis, down $3 from a year earlier," says Plain.
Source: University of Missouri/ Ron Plain