Market hog numbers are down 2.2 per cent to 60.75 million head. Total hog numbers are down 2.3 per cent from a year ago at just over 67 million head. Farrowing intentions for the next quarter are down more than 3 per cent from a year ago, showing a continued reduction of sow inventories. Farrowing intentions in the coming year are also expected to be down more than 3 per cent. Pig supplies have not declined as rapidly as the number of sows in part due to ever improving litter sizes which are 2 per cent larger than a year ago.

Table 1 summarizes the recent swine report for national and Iowa inventories.

Fourth quarter hog slaughter may decline first time since 2000. After years of continued expansion and surges of productive efficiency, the supply of hogs has been growing even after sow numbers started to decline.

Table 2 contains the ISU price and production forecasts for the next four quarters, and futures price adjusted for an Iowa basis. A declining pork supply may not be the only reason to be optimistic about hog prices. Consumer confidence and spending habits have regained some strength as the brunt of the economic recession has passed. Any improvement in economic conditions both domestically and globally will lead to improved demand and prices.

Year-to-date pork exports are down 19 per cent, but that trend has turned since the middle of the year. If trade conditions continue to improve there will be reason to be more optimistic about the future. Japan continues to be the top customer followed by Mexico and Canada. Exports for Russia have been increasing, while exports to mainland China have amounted to only 15 per cent of those a year ago. Figure 1 tracks US pork exports. Exports volumes are back on track with what a traditional year over year increase would have been without last years exception.

Further Reading

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You can view the USDA Quarterly Hogs and Pigs Report - September 2009 by clicking here.