If I’m correct, this will be all-time records for both market and total inventory.

USDA is not expected to make any major revisions in their previous estimates even though hog slaughter during June-August was lower than expected based on the June inventory report. The 43% decrease this summer in slaughter hog imports from Canada explains the difference. June-August slaughter of U.S. raised market hogs was within 0.1% of what the June report implied.

In their last inventory report, USDA predicted June-August farrowings would be 2.0% smaller than a year earlier and September–November farrowings would be down 4.0%. I agree with both these forecasts. I’m forecasting winter farrowings to be down 5.0% compared to December-February 2007. Record feed prices have caused the financial losses that are driving this cut back. Through August, sow slaughter was 8.8% higher than a year ago.

I’m estimating pigs per litter were up 1.5% this summer, making the June-August pig crop 99.5% of a year ago. Feeder pig imports this summer were very close to last year’s level, so the light weight market hog inventory should be in line with the summer pig crop.

My estimates of the September 1 market hog inventory by weight groups are: 180 pounds and heavier 105.6%, 120-179 pounds 104.0%, 60-119 pounds 103.0%, and under 60 pounds 99.5% of a year earlier.

My estimate of hogs in the 60-179 weight groups implies that fourth quarter hog slaughter will be 2.5% or so above year-ago levels, if the inflow of slaughter hogs from Canada continues to be sharply lower. I expect live hog prices to average close to $48/cwt ($63/cwt carcass) in the fourth quarter of 2008. Prices could be much lower if any slaughter plants run into capacity problems.

I expect daily hog slaughter during the first quarter of 2009 to be 1% lower than the number slaughtered in January-March 2008. If so, look for first quarter 2009 hog prices to average close to $52/cwt on a live basis and $68.50/cwt on a carcass basis.