US Swine Economics Report

US - On 30 December, USDA will release the results of their latest survey of the US swine inventory, reports Ron Plain in his Swine Economics Report.
calendar icon 30 December 2009
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My estimates are that the breeding herd is 2.7 per cent smaller than a year ago; the market hog inventory is 3.0 per cent smaller; and the total herd is 2.9 per cent smaller than on 1 December 2008.

My estimates of the 1 December market hog inventory by weight groups are: 180 pounds and heavier 97.1 per cent, 120-179 pounds 96.2 per cent, 50-119 pounds 96.4 per cent, and under 50 pounds 97.9 per cent of a year earlier.

Slaughter of barrows and gilts was down 1.0 per cent during September-November due in large part to a 34 per cent drop in slaughter hogs imports from Canada. Slaughter of US raised barrows and gilts was about 0.4 per cent higher than implied by the September inventory report.

In their last inventory report, USDA predicted that both September-November farrowings and December-February farrowings would be 3.1 per cent smaller than a year earlier. I'm in agreement that fall farrowings were down 3.1 per cent. I am forecasting winter farrowings will be down 3.0 per cent and spring farrowings to be down 2.0 per cent compared to March-May 2009. Despite a lot of red ink, 2009 sow slaughter has been low. March-May sow slaughter was down 14.9 per cent, June-August was down 4.6 per cent, and September-November was down 1.7 per cent compared to 12 months earlier.

I believe pigs per litter were up 1.9 per cent this fall. My estimate is the September-November pig crop was 98.7 per cent of a year earlier. Feeder pig imports during September-November were 21.6 per cent below last fall's level, so the light weight inventory should be down more than the pig crop.

My estimate of hogs in the 50-179 weight groups implies that first quarter hog slaughter will be roughly 4 per cent below year-ago levels, if as expected, the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $48.50/cwt ($64/cwt carcass) in the first quarter of 2010.

I expect hog slaughter during the second quarter of 2010 to be 2-3 per cent lower than the number slaughtered in April-June 2009. If so, second quarter 2010 hog prices should average close to $50.50/cwt on a live basis and $67/cwt on a carcass basis.

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