June Hog and Pig Report Summary

by 5m Editor
2 July 2008, at 10:56am

US - USDA released the June Hog and Report on June 27, and inventories indicate a change of direction in swine production, writes Shane Ellis.

The national swine herd is up 6 percent to a total of 67.7 million swine. Market hog numbers are up 7 percent at 61.6 million head. The indication that the industry is beginning to curtail production is seen in the reduction of breeding swine, down 1 percent to 6.1 million head. With the considerably higher sow slaughter in recent months, a liquidation of the national sow herd was not unexpected.

The supply of market hogs will continue to run higher than a year ago. There will be additional hog supplies through the end of the year, resulting in pork supplies above those of last year, despite declining slaughter weights. The 2008 pig crop has been higher so far this year, but farrowing intentions for the remainder of the year was lower. In addition, the number of pigs produced per litter is nearly 9.4 pigs per litter, which has also expanded supplies. Table 1 summarizes the year over year change in swine inventories both nationally and in Iowa.

Iowa has increased its sow numbers by almost 1 percent and market hog inventories by 7 percent. Through the end of the summer, pork supplies will remain well above those of last year. Table 2 contains the ISU forecasts of changes in production and market hog prices for the next four quarters. It also contains the June 27 lean hog future price adjusted for a cornbelt basis and converted to a live hog price.

Hog slaughter has continued to run well above the volumes of last year. This trend is shown in Figure 1. Slaughter volume will continue to run above those of last year until December. Despite the higher supplies, the market is not likely to take the same dive that it did the fourth quarter of 2007. Supplies in 2009 will start out near those of 2008 but then trend lower at the cost of corn and other feed drives down production.

Further Reading

- You can view the full USDA Quarterly Pigs and Hogs Report - June 2008 by clicking here.

5m Editor