US Swine Economics Report

by 5m Editor
23 June 2010, at 5:22am

US - On 25 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 3.7 per cent smaller than a year ago; the market hog inventory is 3.3 per cent smaller; and the total herd is 3.4 per cent smaller than in June 2009. My estimates of the June 1 market hog inventory by weight groups are: 180 pounds and heavier 97.2 per cent, 120-179 pounds 96.0 per cent, 50-119 pounds 96.5 per cent, and under 50 pounds 96.9 per cent of a year earlier.

Slaughter of barrows and gilts was down 1.7 per cent during March-May as was slaughter of US raised barrows and gilts. After being below year-earlier for 8 consecutive quarters, imports of Canadian hogs for slaughter during March-May 2010 were even with year ago. Slaughter of US raised barrows and gilts was equal to that implied by the March inventory report. I am not expecting any major changes by USDA in their March market hog inventory estimate.

In their last inventory report, USDA predicted that March-May farrowings would be 4.0 per cent smaller than a year ago and June-August farrowings would be 2.4 per cent lower than a year earlier. I agree that spring farrowings were down 4.0 per cent. I am forecasting summer farrowings will be down 3.0 per cent and fall farrowings to be down 2.0 per cent compared to September-November 2009.

December-February sow slaughter was down 2.3 per cent and March-May was down 3.0 per cent compared to 12 months earlier. The decline was even smaller when adjusted for the number of Canadian sows coming south for slaughter.

I believe pigs per litter were up 1.2 per cent this spring. My estimate is the March-May pig crop was 97.2 per cent of a year earlier. Feeder pig imports during March-May were 18.6 per cent below last spring'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 third quarter hog slaughter will be roughly 3.7 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues at year-earlier levels. I expect hog slaughter during the fourth quarter of 2010 to be 3.0 per cent lower than the number slaughtered in October-December 2009. I expect live hog prices to average close to $58/cwt ($77/cwt carcass) in the third quarter of 2010 and $52/cwt ($68/cwt carcass) in the fourth quarter.