All eyes in the U.S. pork industry have been focused on sow slaughter to see when reductions will occur and to what degree. USDA's June Hogs & Pigs Report showed a 3 percent decline from 2008 levels, which was expected. Unfortunately, that's not enough to turn markets around and set forth a more positive price outlook.

Looking ahead, farrowings for June through August are planned to be down 3 percent from last year and for the September through November period intentions are to farrow 2 percent fewer sows.

"The hog industry is having a very tough time; there is a lot of red ink," notes Ron Plain, University of Missouri agricultural economist. "We need to cut back the sow herd, and we have, but at an awfully slow rate. Productivity is offsetting much of those cuts." Certainly, pork producers always cull their least productive sows first.

The pig crop report showed that the March/May farrowings were down 2.7 percent. However producers saved a record number of pigs per litter at 9.61 head. That's 2.5 percent more than in 2008. Plain points out if you look back to the three previous quarters and the gains made in pigs per litter, U.S. producers are averaging 2.5 percent more pigs per litter than earlier trend lines when such productivity gains would run about 1 percent. In the end, the pig crop for the March/May period was down only 0.3 percent.

"Litter size and hog weights are swamping any sow cuts," says Victor Aideyan, senior risk management consultant with HIS Grain Commodities. Because of that, "this amount of breeding herd cuts (seen in the June report) will not produce the type of price relief hoped for."

USDA's pig crop report reflects numbers before June 1. Since then, anecdotal evidence points to an increase in sow slaughter. "Sow prices in recent weeks have declined, so that tells us sow buyers are not having trouble finding sows," says Aideyan. Other conversations tell him that more pork processors are now considering starting or adding sow slaughter shifts.

Still, the move to sell sows and reduce overall pork production has been slow. "Seems like people are in denial," says Bob Brown, an independent market analyst in Edmond, Okla. He points to this year's tepid sow slaughter trends. "From March to September 2008, we had 31 weeks of sow slaughter around 69,000 head per week; we thought that was a liquidation phase." Based on the latest weekly sow slaughter data, which is June 14, it was the first time since January that sow slaughter approached 64,900 head. "We're not even at a level that reflects liquidation," he adds.

And one week near 65,000 does not make a trend, points out Plain. "We've got a long way to go to have some sign that we're cutting the herd to have meaningful impact." He believes a 10 percent cut is needed. 

Brown agrees, but adds that a reduction in sows is not enough. "It has to involve total disappearance in pork supply in order for prices to improve."