US Swine Economics Report

Regular report by Ron Plain on the US Swine industry.
calendar icon 2 October 2006
clock icon 3 minute read
Ron Plain
Ron Plain

USDA's September hogs and pigs report had no big surprises. All the key numbers were within one percentage point of my pre-release estimates. So it goes without saying, USDA did a good job.

Summer hog slaughter turned out to be higher than expected. The market hog inventories in USDA's June Hogs and Pigs Report implied that June-August slaughter would be 0.4% smaller than last year. Daily slaughter during these three months was actually up roughly 0.5%, despite fewer slaughter hogs coming south from Canada than a year ago. So, USDA made the necessary revisions in the June inventory estimates to make slaughter and inventory balance.

They added 490,000 head to the June market hog inventory. Surprisingly, USDA added only 2,000 head to the December-February pig crop and nothing to the March-May pig crop. The other 488,000 head, I assume, comes from reduced death loss and more imports of Canadian feeder pigs than previously estimated.

America's hog producers continue to get better at what they do. Pigs per litter during June-August set a new record of 9.14 head. This was 0.88% more than last summer and 1.44% higher than June-August 2004. The hot summer apparently didn't have an adverse impact on pig survival.

The number of litters farrowed per breeding animal has been flat for the last couple of years. It is difficult to tell whether this reflects a real problem, the move to weaning pigs later, or just a data error. An exact measure of breeding herd size is difficult to come by.

The U.S. breeding herd was 107,000 head larger on September 1 than a year earlier. Interestingly, the top three states, (Iowa, North Carolina and Minnesota) had 20,000 fewer sows than a year-ago. Does this reflect some sort of problem for areas with high hog density, or just an interesting aberration?

The last 2.5 years have given hog producers one of the best runs of good prices in the last 50 years. USDA forecasts that winter farrowings will be up 2.2%. If pigs per litter and slaughter weights continue to increase, we could see summer 2007 pork production 3% above this year's level. What's the old saying? The surest cure for high prices is high prices.

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