ThePigSite.com - news, features, articles and disease information for the swine industry

News

June Quarterly Hogs & Pigs Report Analysis

28 June 2011
Ron Plain
Ron Plain

US - USDA's June hogs and pigs report said the hog herd was slightly larger than pre-release trade forecasts, writes Ron Plain.

USDA's estimate of the total number of hogs and pigs on US farms at the start of June was 0.5 per cent larger than 12 months earlier. (See Table 1 below) The average of the pre-release trade estimates was for a 0.1 per cent increase I each of these three categories.

USDA made some minor revisions to past inventory estimates to bring them more in line with spring hog slaughter. USDA raised their previous estimate of the December market hog inventory by 300,000 head (0.5 per cent), lowered their March market hog inventory estimate by 155,000 (0.35 per cent) increased the reported number of sows farrowed during September-November 2010 by 1.2 per cent and increased the September-November pig crop by 338,000 head (1.2 per cent).

The June swine breeding herd is the largest since December 2009, but is 6.9 per cent lower than at the last cycle peak in December 2007. The US swine breeding herd has increased for three consecutive quarters. In 2010 the June breeding herd inventory was 28,000 head larger than on March 1. This year it was 15,000 head larger. Thus, USDA says the breeding herd grew by 13,000 head less this spring than last. March-May sow slaughter was down by 3,900 head compared to a year ago. Imports of Canadian sows for slaughter was down by 19,000, leaving 15,100 more US sows slaughtered this spring than last. The USDA data implies 2,100 more gilts were added to the breeding herd this spring than last.

USDA said spring (March-May) farrowings were down 1.8 per cent and forecast summer and fall farrowings to be down 2.6 per cent and 1.1 per cent, respectively, compared to 12 months earlier. (See Table 3) Spring farrowings were the same as trade expectations. The forecast of summer farrowings is 0.6 per cent lower than expected and fall farrowings are forecast to be 0.3 per cent below the trade forecast. The lack of growth is likely due to high feed costs which have pushed breakeven prices above $65/cwt (live) and $86/cwt (carcass). If USDA is right, the number of sows farrowed will be below year-earlier for 14 consecutive quarters. USDA says the breeding herd is up 0.3 per cent, but the number of litters to be farrowed in the next six months will be down 1.9 per cent. That seems an unlikely combination.

The number of pigs per litter remains high. The trade was expecting a 1.5 per cent increase, but USDA said March-May pigs per litter were 2.2 per cent higher than the same months last year. The benefit of reduced farrowings is being offset by increases in the number of pigs weaned per litter. Spring farrowings were down 1.8 per cent; but with 2.2 per cent more pigs per litter, the spring pig crop was up 0.4 per cent.

USDA's survey indicated the number of market hogs weighing 180 pounds or more on 1 June was down 0.5 per cent compared with 12 months earlier. (See Table 2) However, it looks like June barrow and gilt slaughter will be 1.7 per cent below last year. The 120-179 pound market hog group was up 3.3 per cent from June 2010. The 50-179 pound inventory was down 0.2 per cent; and the inventory of pigs weighing less than 50 pounds was up 0.1 per cent compared to a year earlier.

Live animal imports from Canada during the March-May quarter showed feeder pigs up 2.2 per cent and slaughter hog imports down 7.6 per cent due to a 15 per cent drop in imports of sows for slaughter. In 2007, 10.0 million live hogs were imported from Canada. In 2009, 6.4 million head came south. Imports of Canadian hogs and pigs for 2010 totaled 5.7 million head. Look for 2011 imports to total close to 5.6 million head.

Based on the 50-179 pound market hog inventory and the expectation of little change in live hog imports, our forecast is for an increase of 1.6 per cent in third quarter 2011 daily hog slaughter compared to July-September 2010. With this level of pork production, we expect 51-52 per cent lean hogs to average in the mid to upper $60s live and Iowa-Minnesota negotiated sales to average close to $90/cwt on a carcass weight basis.

For the fourth quarter of 2011 we expect daily hog slaughter to be steady but total slaughter to be down 1.2 per cent due to one fewer slaughter day compared to October-December 2010 with 51-52 per cent lean hogs averaging close to $60 live, and Iowa hogs averaging in the upper $70s/cwt on a carcass basis.

With the number of litters farrowed expected to be down 2.6 per cent this summer and pigs per litter increasing by 2 per cent or so, the summer pig crop is likely to be slightly below a year earlier. We are forecasting first quarter 2012 slaughter to be down 0.6 per cent compared to a year ago. Look for carcass prices of barrows and gilts to average in the low $80s/cwt. Slaughter weights are likely to average 0.5-1.0 per cent higher next year.

The forecast 1.1 per cent decrease in fall farrowings should be supplemented by an increase in litter size to yield a fall pig crop slightly above a year-earlier causing second quarter 2012 hog slaughter to be up 0.4 per cent or so on a daily basis. Our estimates of slaughter and prices for the next four quarters are in Table 4. Our price forecasts are well below what the futures market is predicting.

Table 1.  Hog Inventories June 1, US
______________________________________________________________

                                           2011 as % of 2010
       Market                                    100.5
       Kept for breeding                         100.3
       All hogs and pigs                         100.6
______________________________________________________________

Table 2.  Market Hogs on Farms June 1, U.S.
______________________________________________________________

     Weight Category                       2011 as % of 2010
        Under 50 pounds                          100.1
        50 - 119 pounds                           99.8
        120 - 179 pounds                         103.3
        180 pounds and over                       99.5
	Pig Crop
	  March-May				 100.4
______________________________________________________________

Table 3.  Sows Farrowed and Farrowing Intentions, U.S.
______________________________________________________________

       					        2010 as % of 2009
       December-February      			      95.4
	 March-May 2010			 	      97.1
	 June-August 2010			      99.5
	 September-November 2010		      98.8
					        2011 as % of 2010
	 December-February			      99.4
	 March-May 2011				      98.2
	 June-August 2011			      97.4
	 September-November			      98.9%
______________________________________________________________

Table 4.  Commercial Hog Slaughter and Barrow and Gilt Price by Quarter
________________________________________________________________________

           --Comm. Slaughter--   ------Barrows & Gilts, price/cwt------
                     Change        51-52%    Iowa-Minn   Non-packer-sold
Year &     Million    from         Lean         Base            Net
Quarter      Head   Year ago       Live        Carcass        Carcass
_________________________________________________________________________

2006 1       26.208   + 2.6%       $42.63       $56.38         $58.37
     2       24.839   - 0.8         48.45        65.27          65.96
     3       25.810   + 1.1         51.83        68.04          69.13
     4       27.880   + 1.4         46.13        60.53          62.04
     Year   104.737   + 1.1         47.26        62.54          63.86

2007 1       26.684   + 1.8%       $46.04       $59.90         $62.69
     2       25.526   + 2.8         52.55        69.45          71.39
     3       26.566   + 2.9         50.34        66.14          69.17
     4       30.396   + 9.0         39.44        52.08          56.83
     Year   109.172   + 4.2         47.09        61.91          65.04

2008 1       29.601   +10.9%       $39.64       $52.49         $57.41
     2       27.941   + 9.5         52.51        70.43          72.24
     3       28.696   + 8.0         57.27        75.67          78.05
     4       30.214   - 0.6         41.92        55.60          61.38
     Year   116.452   + 6.7         47.83        63.58          67.27

2009 1       28.503   - 3.7%       $42.11       $57.23         $60.43
     2       27.072   - 3.1         42.74        57.32          61.76
     3       28.428   - 0.9         38.90        51.43          56.68
     4       29.615   - 2.0         41.20        54.98          57.64
     Year   113.618   - 2.4         41.24        55.23          59.11

2010 1       27.630   - 3.1%       $50.41       $66.81         $68.32
     2       26.074   - 3.7         59.60        79.04          79.42
     3       26.930   - 5.3         60.13        79.44          80.70
     4       29.626   + 0.1         50.11        65.21          69.26
     Year   110.260   - 3.0         55.06        72.62          74.47

2011 1	     27.486   - 0.5	   $59.94       $79.28         $80.63
     2*	     26.063   - 0.0	    68.26	 91.90		92.10
     3**     27.360   + 1.6	  65 - 69      86 - 91	      88 - 93
     4**     29.270   - 1.2	  57 - 61      75 - 80	      77 - 82
     Year** 110.079   - 0.1	  63 - 65      83 - 86 	      85 - 88

2012 1**     27.330   - 0.6	 $60 - 64     $79 - 84	     $81 - 86
     2**     26.170   + 0.4	  65 - 69      85 - 90	      87 - 92
 *estimated
 **forecast
_______________________________________________________________________

ThePigSite News Desk



Share This

News By

Related News

US Pork exports going steady

News from United States  07 November 2017

More News

Our Sponsors

Partners


Seasonal Picks

The Commuter Pig Keeper - 5m Books