US Swine Economics Report

by 5m Editor
24 June 2009, at 7:54am

US - On 26 June USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his Swine Economics Report.

My estimates are that the breeding herd is 2.0 per cent smaller than a year ago, the market hog inventory is 0.9 per cent smaller, and the total herd is 1.0 per cent smaller than on 1 June, 2008.

Total slaughter of barrows and gilts was down roughly 3.4 per cent during March-May due, in large part, to a 56 per cent drop in imports of slaughter hogs from Canada. Slaughter of US raised hogs was a bit higher than expected based on the March inventory report. Since 1 June, slaughter of US raised barrows and gilts has been up about 1 per cent compared to the same weeks last year.

My estimates of the 1 June market hog inventory by weight groups are: 180 pounds and heavier 101.2 per cent, 120-179 pounds 99.0 per cent, 60-119 pounds 98.0 per cent, and under 60 pounds 99.0 per cent of a year earlier.

In their last inventory report, USDA predicted March-May farrowings would be 2.9 per cent smaller than a year earlier and June-August farrowings would be down 4.0 per cent. I'm estimating spring farrowings actually were down only 1.0 per cent and summer farrowings also will be down 1.0 per cent. I'm forecasting fall farrowings to be down 0.8 per cent compared to September-November 2008. Declining feed prices in the second half of 2008 halted what had been a rapid reduction in the sow herd. December-February, sow slaughter was 7.4 per cent lower than a year earlier and March-May sow slaughter was down 15.2 per cent.

I'm estimating that pigs per litter were up 1.8 per cent this spring. My estimate is the March-May pig crop was 100.8 per cent of a year earlier. Feeder pig imports during March-May were 25 per cent below last spring's level.

My estimate of hogs in the 60-179 weight groups implies that third quarter daily hog slaughter will be 2-3 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $47/cwt ($62/cwt carcass) in the third quarter of 2009.

I expect hog slaughter during the fourth quarter of 2009 to be 1-2 per cent lower than the number slaughtered in October-December 2008. If so, look for fourth quarter 2009 hog prices to average close to $42.50/cwt on a live basis and $55/cwt on a carcass basis.