CME: Hogs and Pigs Report a Mixed Bag

US - CME's Daily Livestock Report for 30 December 2008.
calendar icon 31 December 2008
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First, a New Year message to all our readers:

USDA’s quarterly Hogs and Pigs Report, released Tuesday afternoon, was about as much of a mixed bag as we can recall with some numbers higher and some lower and few unifying patterns. The key numbers from the report appear in the table at left along with the average pre-report estimates and differences between the year-over-year percentages. Some key numbers are:

  • The 180-lb. and over category, at 11.518 million head, was 0.4 per cent lower than one year ago. US FI hog slaughter for the four weeks ended on 27 December was 2 per cent (177,400 head) lower than last year. But lower market hog and cull breeding stock imports from Canada accounted for ALL of the decrease in slaughter — plus some! That means the slaughter of US-fed hogs that would have been in the 1 December count was actually LARGER than last year — but not by enough to call the accuracy of this category or, by extension, the report into question.

  • The breeding herd was about 1 per cent larger than expected, reflecting the slowdown of US sow slaughter from September onward. The 2.4 per cent reduction in the breeding herd will be partially offset by productivity increases in the coming year — especially if weights increase due to lower feed prices.

  • September-November farrowings, the September-November pig crop and the under 60-lb. inventory are internally consistent but still surprisingly low relative to both expectations and the breeding herd. These numbers say that a breeding herd down 2.6 per cent on 1 September and 2.4 per cent on 1 December farrowed 4 per cent fewer litters. If true, that is a large productivity reduction but not one that is out of question. Possible reasons: Some sows went unbred when feed prices were high in May through July or sows were sold in early summer and gilts were added in late summer and fall. Growing farrowing intentions over the next two quarters would support the latter hypothesis. The sharply lower September-November pig crop implies much tighter supplies in Q2-09 (see chart below).
  • The report suggests US slaughter will be down about 3 per cent in 2009, assuming our adjustments for lower Canadian imports, which are listed on the chart, are correct.

Further Reading

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