US Hog Data Expected To Show Summer-Fall Supply Peak

by 5m Editor
24 June 2004, at 12:00am

US - Market watchers suspect that the U.S. Department of Agriculture's June quarterly hogs and pigs report will perhaps bear witness to substantial March through May slaughters and Canadian imports. Moreover, it will suggest continued increased production for the next few months but also show a modest reduction in breeding intentions for the balance of the year.

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The USDA's quarterly hog data will be released on Friday at 1400 CT (1900 GMT).

Pundits' projections for the top three categories included a June 1 all-hogs-and-pigs estimate that ranged from 99.0% to 102.0% of a year ago, with an average of 100.9%.

Respondents submitted a 98.1% average projected kept-for-breeding figure from a 97.0% to 99.5% range. And they arrived at a 101.2% average kept-for-market number from forecasts that ranged from 99.0% to 103.0%.

Slaughters during March 1 through the end of May were up 4.1% from a year, which included a 31.7% jump in total number of Canadian hog imports, compared with a year ago. The increase from year-ago in the number of hogs imported from Canada that went directly to U.S. processors amounted to about 255,000-head from January to May, a 35% jump.

The USDA's March quarterly hog report projected a 1% to 3% increase in production for early March to late-May.

Meanwhile, influence from a multitude of meat bans around the globe, imposed to battle the threat of bovine spongiform encephalopathy, or mad-cow disease, and various forms of avian influenza, or bird flu, boosted U.S. total pork and pork variety meat exports by 41% for the first four months of this year versus a year ago, according to the latest USDA figures.

Memorial Day's official start of the summer grilling season in the U.S. only served to intensify pork demand despite record pork production and at higher prices for specific cuts.

Chuck Levitt, senior livestock market analyst with Alaron Trading Corp., said March through May slaughters were actually in line with USDA's 59.315-million head hog and pig population figure released in the last quarterly report, especially when one takes into account the large influx of Canadian hogs during that period.

Producers recorded profitable financial returns this spring, but large domestic operators did not appear interested in building breeding herds, said Levitt. This may be because overall losses suffered during the past two years may still be fresh in their minds, he said.

"I believe that their (producers') retention of gilts and boars did not match the number of sows and boars sent to slaughter during the spring," Levitt said.

Bob Brown, an independent analyst, anticipates total inventories to rise 1% from a year ago versus a little more than 1% dip in the breeding herd. However, the inventory of hogs over 60 pounds could grow as much as 2.5% in part because of record Canadian hogs that entered the U.S. from March through May of 2004, he said. Those imported pigs should be included in the kept-for-marketing figures provided by producers to the USDA.

Glenn Grimes, University of Missouri agricultural economist, expects fourth-quarter slaughters up 2% on a daily basis, but down about 1% for the quarter because of one less kill week during the period.

After what happened during the first five months of the year, with hogs 51% to 52% lean hogs prices at 28.4% above a year ago, with the increase driven by strong demand in the face of increased kills, the concern is whether that success will carry over into the remaining months of the year, said Grimes.

Source: eFeedLink - 24th June 2004

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