US Swine Economics Report

Regular report by Ron Plain on the US Swine industry.
calendar icon 26 June 2007
clock icon 3 minute read

On Friday, USDA will release the results of their latest survey of the U.S. swine inventory. My calculations indicate the breeding herd is 0.9% larger than a year ago, the market hog inventory is 2.4% larger, and the total herd is 2.3% bigger than on June 1, 2006.

I expect USDA will make some upward revisions in some of their previous estimates. Hog slaughter during March-May was roughly 1.8% higher than expected based on the March inventory report. Some of this increase may be due to lower death loss and faster gains, but I expect most was due to more litters farrowed than previously estimated.

In the March Hogs and Pigs Report, USDA predicted March-May farrowings would be 0.5% smaller than a year earlier and June-August farrowings would be up 0.2%. I'm estimating that spring farrowings were actually up 1.2% and summer farrowings will be 1.0% larger than last year. My forecast is that fall farrowings will be up 0.8% compared to September-November 2006.

Despite profits during the last 3 years, sow slaughter has been running above year-ago levels, due in part, to the dramatic increase in corn prices.

I'm estimating that pigs per litter this spring were up 0.7%, making the March-May pig crop 101.9% of a year ago. Feeder pig imports from Canada were up 10% this spring, so the light weight market hog inventory should be up a bit more than the pig crop implies.

My estimates of the June 1 market hog inventory by weight groups are: 180 pounds and heavier 103.8%, 120-179 pounds 102.3%, 60-119 pounds 102.2%, and under 60 pounds 102.0% of a year earlier. Hog slaughter the last two weeks have been up 4% compared to the same period last year.

My estimate of the number of hogs in the 60-179 weight groups implies that third quarter hog slaughter will be 2.3% above year-ago levels, or a bit higher if the inflow of slaughter hogs from Canada continues running above year-ago levels. I expect live hog prices to average close to $50/cwt in the third quarter of 2007.

If my estimate of the light weight inventory is correct, fourth quarter 2007 hog slaughter should be a little over 2% larger than the number slaughtered in October-December 2006. If so, look for fourth quarter 2007 hog prices to average close to $44/cwt on a live basis, unchanged from a year earlier.

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