US Inventory Predictions: Marginal Contraction in Breeders, While Hogs Continue to Rise

US - On March 28 USDA will release the results of their latest survey of the US swine inventory. Ron Plain believes the national breeding herd will have contracted by 1.0 per cent on the previous year ago, but the market hog inventory has, and will continue to move in the opposite direction.
calendar icon 27 March 2008
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Preliminary figures estimate a 4.9 per cent increase in the finishing pig herd. All together across the entire sector the total number of pigs farmed in the US is likely to have increased by 4.3 per cent on last years statistics. USDA will make upward revisions in their previous estimates.

"Hog slaughter during December to February has been much higher than expected and a 30 per cent increase in slaughter hog imports from Canada only explains only part of the difference, says Plain.

US slaughterings of domestically reared pigs was 4.5 per cent higher than the December report and the effects of circovirus vaccine were also coming through. The vaccine has proved effective and is reducing mortality - which has increased productivity and so the number of pigs coming forward for processing.

In the previous inventory, USDA predicted December-February farrowings would be 2.4 per cent higher than the previous year with spring farrowings (March–May)up 0.1 per cent.

Contrasting View

Mr Plain disagrees and says his calculation show winter farrowings up 2.5 per cent and spring averages at 1.0 higher larger than last year.

"I’m forecasting summer farrowings to be down half a per cent compared to June-August 2007. Producers are losing lots of money and winter sow slaughters have gone up - they are was 3.3 per cent higher than a year ago," he adds.

He also notes that improved fertility and sow performance has also increased the December-February pig crop - taking it to 103.2 per cent of a year ago. Live rearing pig imports from Canada have also increase by a third during the winter months, and this will boost the light weight finished pig inventory by about 1 per cent.

And in terms of weight, Mr Plain expects to see increases to pig numbers across all weight bands.

"My estimate of hogs in the 60-179 weight groups implies that second quarter hog slaughter will be six per cent or so above year-ago levels as long as the inflow of slaughter hogs from Canada continues to be above year-ago levels. I expect live hog prices to average close to $47/cwt in the second quarter of 2008," he adds.

By the third quarter of this year he says hog slaughter will be nearly five per cent larger than it was for July-September 2007. As a result prices will fall to an average of $46/cwt liveweight.

Further Reading

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