The third quarter 2008 USDA Hogs and Pigs report released Friday shows relative stability in the U.S. swine herd with a slight reduction in the number of animals kept for breeding as well as farrowing intentions.

The breeding herd size at 6.05 million, showed a slight reduction of 3 percent from the same quarter last year. “I was hoping the breeding herd size would have been a little smaller than it is,” said Glenn Grimes, professor emeritus and Extension marketing specialist, University of Missouri. Grimes also expects a fourth quarter increase in slaughter levels. “We’re expecting the fourth quarter slaughter to be up 2 percent from last year.”

Grimes sees the possibility of profitability for average producers by the second and third quarter of 2009, provided the price of corn does not increase dramatically.

A surprise was in pigs saved per litter at 9.51 which was a record. The pigs saved per litter is a key number. “Clearly productivity is increasing,” says Jim Robb, Director of the Livestock Marketing Information Center, Lakewood, Colo. “We estimate U.S. slaughter at 1.5 percent over year ago levels for the fourth Quarter of 2008.” The LMIC is predicting a decrease in the number of slaughter hogs coming down from Canada. 

“We expect hog prices in the fourth quarter to average about 14 percent above a year ago with a national average base hog price in the low to mid 60’s per hundredweight on a dressed basis,” says Robb. He also sees a possibility for a “little bit of profitability” by the second and third quarters of 2009. “The U.S. numbers are declining on the breeding herd which will mean declining slaughter numbers as we look ahead to 2009.”

“Overall, I feel that the numbers are indicative of what’s going on in the industry,” says Dan Vaught, Livestock Analyst with Wachovia Securities, St. Louis, Mo. “We’re seeing some industry liquidation due to high costs for feed and fuel.”