The U.S. swine breeding herd is 3 percent smaller than a year ago, according to Ron Plain, agricultural economist, University of Missouri. The market hog inventory is 2.5 percent smaller, and the total herd is 2.6 percent smaller than on December 1, 2007, according to Plain’s estimates.

With September-November hog slaughter 4 percent lower than expected, the USDA is expected to make some downward revisions in their previous estimates. Half of the reduction was due to a 56 percent drop in imports of Canadian slaughter hogs. There also appears to be fewer U.S.-raised hogs.

”I'm going with fall farrowings down 5 percent and winter farrowings down 3 percent,” says Plain. “I'm forecasting spring farrowings to be down 3 percent compared to March-May 2008. Through November, sow slaughter was 6.4 percent higher than a year ago."

The economist estimates that pigs per litter were up 1.5 percent this fall, making the September-November pig crop 96.5 percent of a year ago. Feeder pig imports this fall were below last year's level, so the light weight market hog inventory should be down more than the fall pig crop.

Plain’s estimates of the 1 December market hog inventory by weight groups are: 180 pounds and heavier 99.5 percent, 120-179 pounds 98.5 percent, 60-119 pounds 97.5 percent, and under 60 pounds 95.8 percent of a year ago. “I expect live hog prices to average close to $46 per hundredweight or $60 per hundredweight carcass in the first quarter of 2009.

I expect hog slaughter during the second quarter of 2009 to be 5 percent lower than the number slaughtered in April-June 2008. If so, look for second quarter 2009 hog prices to average close to $55 per hundredweight on a live basis and $72.50 per hundredweight on a carcass basis.