June Hog and Pig Report

US - The national swine herd continues to increase above inventories of a year ago, reports Shane Ellis in his Quarterly Hogs and Pigs commentary.
calendar icon 6 July 2006
clock icon 3 minute read

Total hog numbers were up a third percent from a year ago at just under 61 million head. Breeding hog numbers also increased 1.4 percent and now number over 6 million head. Among market hog inventories total numbers increased 0.2 percent, while the inventory of hogs less than 180 pounds increased, the number of hogs weighing more than 180 pound inventory decreased by 1.8 percent. Table 1 is a summary of the June Hog and Pig report and how swine inventories have changed in from a year ago.

The number of pigs born in the past two quarters is up 1.2 percent and the average number of pigs born per litter was a record high of 9.08 pigs. Farrowing intentions for the rest of the year have also increased. Feeder pig supply will continue to increase through the near future. Although hog prices are less glossy than a year ago, the hog market is still profitable enough to encourage farrowing expansion at a deliberate, steady pace.

Pork production has been increasing as more pigs are being produced and imported, and slaughter weights have increased with plenty of cheap corn. As the ethanol industry increases demand for corn, there is a strong potential for corn feed prices to be higher than previous years. Finishing weights for slaughter hogs will likely decrease as corn becomes more expensive. Commercial pork production in the first quarter of 2006 was up 3.5 percent but is expected to level off in the second and third quarter to within a percentage of last year’s production.

Pork prices rallied in the month of June and there is plenty of optimism in the market place that prices could stay there. Although supplies are increasing, demand is keeping step. The increases in prices has lead to some finishers selling their hogs without extended feeding times, which may explain some of the reduction in the inventory of pigs weighing over 180 pounds. In table 2 are the forecasted prices for the next four quarters and the CME futures prices. Prices are stronger and are appear to demand driven.

Producers will benefit from the recent rally in prices, which could further encourage expansion. Corn prices could affect profitability in the coming year, but so far the corn growth has been good. Even with a jump in corn prices the farrow to finish producers should see a profitable second half of the year.

To read the June 2006 Quarterly Pigs and Hogs report, click here

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