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March Quarterly Hogs & Pigs Report Analysis

03 April 2013
Ron Plain
Ron Plain

US - USDA's March Hogs and Pigs Report showed the market hog inventory was 1.6 per cent larger than a year ago, writes Ron Plain.

USDA said that hogs kept for breeding was up 0.2 per cent. USDA's estimate of the total number of hogs and pigs on US farms at the start of March was 1.5 per cent larger than 12 months earlier. (See Table 1 below) The average of the pre-release trade estimates were for a 0.3 per cent increase in the swine breeding herd and a 0.7 per cent increase in the total inventory.

USDA made some modest revisions to past inventory estimates to bring them in line with winter hog slaughter. USDA raised their previous estimate of the September market hog inventory by 470,000 head (0.8 per cent) and raised their estimate of the December market hog inventory by 65,000 head (0.1 per cent). They increased the reported number of sows farrowed during June-August by 38,000 (1.3 per cent) and also increased the June-August pig crop by 385,000 head (1.3 per cent).

The March swine breeding herd is 17,000 head larger than on December 1. In 2012, the March breeding herd inventory was also 17,000 head larger than on December 1. Thus, USDA says the breeding herd grew by the same amount this winter as last. December-February sow slaughter was down 8,300 from a year ago. Imports of Canadian sows for slaughter were up by 3,600, leaving 11,900 (1.9 per cent) fewer US sows slaughtered this winter than last. The USDA data implies 11,900 more gilts were added to the breeding herd this winter than last.

USDA said winter (December-February) farrowings were up 0.5 per cent from a year ago. They said spring farrowing intentions are down 0.9 per cent compared with a year ago and summer farrowings are likely to be down 0.8 per cent compared to 12 months earlier. (See Table 3) Winter farrowings were 0.4 per cent higher than trade expectations and 0.5 per cent higher than forecast made by the December inventory survey. USDA's forecast of spring farrowing intentions is 0.4 per cent higher than pre-release expectations and 1.0 per cent higher than the December report predicted. Summer farrowing intentions are 1.7 per cent below the trade forecast. USDA says the breeding herd is up 0.2 per cent, but the number of litters to be farrowed in the next six months will be down 0.8 per cent. History shows farrowing intentions to be a better predictor of future hog slaughter than is the breeding herd inventory.

The number of pigs per litter during December-February, 10.08 head, was up 1.1 per cent from a year ago. The trade was expecting a 1.1 per cent increase. The 10.08 pigs per litter was a new record for the winter quarter. Winter farrowings were up 0.5 per cent and with 1.1 per cent more pigs per litter, the winter pig crop was up 1.6 per cent.

USDA's survey indicated the number of market hogs weighing 180 pounds or more on March 1 was up 2.3 per cent compared with 12 months earlier. (See Table 2) It looks like daily barrow and gilt slaughter in March was up 2.5 per cent compared to a year ago. The 120-179 pound market hog inventory was up 2.2 per cent from a year ago. The 50-179 pound inventory group was up 1.5 per cent from a year earlier. The inventory of pigs weighing less than 50 pounds was up 1.0 per cent compared to a year earlier.

Live animal imports from Canada during the December-February quarter showed feeder pigs down 10 per cent and slaughter hog imports also down 10 per cent. The December-February pig crop was up 0.3 per cent and pig imports were down yet the inventory of pigs weighing 120 pounds or more on March 1 was up 2.2 per cent.

Based on the market hog inventory and the expectation of a slow decline in live hog imports, our forecast is for an increase of 1.7 per cent in second quarter 2013 daily hog slaughter. With this level of pork production, we expect 51-52 per cent lean hogs to average in the mid $60s live and Iowa-Minnesota negotiated sales to average close to $87/cwt on a carcass weight basis.

For the third quarter of 2013 we expect hog slaughter to be up 1.1 per cent on a daily basis with 51-52 per cent lean hogs averaging close to $65/cwt live and Iowa hogs averaging around $86/cwt on a carcass basis.

With the number of litters farrowed expected to be down 0.9 per cent this spring and pigs per litter increasing by 1.0 per cent or so, the spring pig crop is likely to be close to a year earlier. We are forecasting fourth quarter 2013 daily slaughter to be up 0.3 per cent compared to a year ago. Look for carcass prices of barrows and gilts to average in the high $70s/cwt.

The forecast 0.8 per cent decrease in summer farrowings should be offset by an increase in litter size to yield a summer pig crop that is up about 0.4 per cent compared to a year-earlier. We are forecasting first quarter 2014 hog slaughter to be up 0.3 per cent on a daily basis.

Our estimates of slaughter and prices for the next four quarters are in Table 4. We anticipate a tight supply of competing meats in 2013 will allow for hog prices close to year-ago despite a slight increase in hog slaughter.

Table 1. Hog Inventories March 1, U.S.

  2013 as % of 2012
All hogs and pigs 101.5
Kept for breeding 100.2
Market hogs 101.6

Table 2. Market Hogs on Farms March 1, U.S.

Weight Category 2013 as % of 2012
Under 50 pounds 101.0
50 - 119 pounds 101.5
120 - 179 pounds 102.2
180 pounds and over 102.3
Pig Crop
December-February 101.6

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

  2012 as % of 2011
December-February 100.7
March-May 2012 102.2
June-August 2012 100.0
September-November 2012 99.0
  2013 as % of 2012
December-February 100.5
March-May 2013 99.1
June-August 2013 99.2

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

  Comm. Hog SlaughterBarrows & Gilts, price/cwt
Year & QuarterMillion headPercent Change from year ago51-52% Lean LiveIowa-Minn Base CarcassNon-packer-sold Net Carcass
MonthlyDaily
2008 1 29.601 +10.9% +10.9% $39.64 $52.49 $57.41
2 27.941 + 9.5 +9.5 52.51 70.43 72.24
3 28.696 + 8.0 +6.3 57.27 75.67 78.05
4 30.214 - 0.6 -0.6 41.92 55.60 61.38
Year 116.452 + 6.7 +6.3 47.83 63.58 67.27
2009 1 28.503 - 3.7% -2.2% $42.11 $57.23 $60.43
2 27.072 - 3.1 -3.1 42.74 57.32 61.76
3 28.428 - 0.9 -0.9 38.90 51.43 56.68
4 29.615 - 2.0 -2.0 41.20 54.98 57.64
Year 113.618 - 2.4 -2.0 41.24 55.23 59.11
2010 1 27.630 - 3.1% -3.1% $50.41 $66.81 $68.32
2 26.074 - 3.7 -3.7 59.60 79.04 79.42
3 26.930 - 5.3 -5.3 60.13 79.44 80.70
4 29.626 + 0.1 +0.1 50.11 65.20 69.26
Year 110.260 - 3.0 -3.0 55.06 72.67 74.47
2011 1 27.483 - 0.5% -2.1% $59.94 $79.28 $80.63
2 26.110 + 0.1 +0.1 68.80 91.80 92.39
3 27.379 + 1.7 +1.7 71.06 94.03 95.74
4 29.888 + 0.9 +2.5 64.66 85.03 87.39
Year 110.860 + 0.5 +0.5 66.11 87.54 89.04
2012 1 28.104 + 2.3% +2.3% $62.66 $84.78 $86.56
2 26.659 + 2.1 +2.1 61.79 85.45 87.76
3 27.963 + 2.1 +3.7 61.43 83.15 87.69
4 30.426 + 1.8 +0.2 58.63 79.93 82.92
Year 113.152 + 2.1 +2.1 61.13 83.36 86.23
2013 1* 27.875 - 0.8% +0.8% $59.95 $79.93 $83.51
2** 27.123 + 1.7 +1.7 64 - 66 85 - 89 87 - 91
3** 28.702 + 2.6 +1.1 63 - 65 84 - 88 86 - 90
4** 30.531 + 0.3 +0.3 57 - 60 76 - 80 78 - 82
Year ** 114.231 + 1.0 +1.0 61 - 64 81 - 85 83 - 87
2014 1** 27.970 + 0.3% +0.3% $60 - 63 $80 - 84 $82 - 86
*estimated
**forecast

Further Reading

You can view the USDA Hogs and Pigs report by clicking here.

ThePigSite News Desk



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