US Swine Economics Report

by 5m Editor
24 March 2010, at 7:10am

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

My estimates are that the breeding herd is 2.2 per cent smaller than a year ago; the market hog inventory is 1.2 per cent smaller; and the total herd is 1.3 per cent smaller than in March 2009. My estimates of the 1 March market hog inventory by weight groups are: 180 pounds and heavier 98.8 per cent, 120-179 pounds 98.0 per cent, 50-119 pounds 98.5 per cent, and under 50 pounds 99.4 per cent of a year earlier.

Slaughter of barrows and gilts was down 4.0 per cent during December-February due in small part to a 14 per cent drop in slaughter hogs imports from Canada. Slaughter of US raised barrows and gilts was about 2 per cent lower than implied by the December inventory report. Look for USDA to revise downward their estimates of the December market hog inventory, June-August farrowings and June-August pig crop.

In their last inventory report, USDA predicted that December-February farrowings would be 1.9 per cent smaller than a year ago and March–May farrowings would be 2.8 per cent lower than a year earlier. I estimate that winter farrowings were down 2.0 per cent. I am forecasting spring farrowings will be down 2.5 per cent and summer farrowings to be down 1.1 per cent compared to June-August 2009. Despite a lot of red ink, sow slaughter has been fairly stable during the last 6 months. September-November sow slaughter was down 1.7 per cent and December-February was down 2.4 per cent compared to 12 months earlier. These are smaller declines than the number of sows available for slaughter.

I believe pigs per litter were up 1.9 per cent this winter. My estimate is the December-February pig crop was 99.9 per cent of a year earlier. Feeder pig imports during December-February were 8.6 per cent below last winter’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 second quarter hog slaughter will be roughly 2 per cent below year-ago levels, if as expected, the inflow of slaughter hogs from Canada continues to be down. I expect hog slaughter during the third quarter of 2010 to be 1 per cent lower than the number slaughtered in July-September 2009. I expect live hog prices to average close to $54/cwt ($72/cwt carcass) in both the second and third quarters of 2010.