USDA Report Reveals Smaller Breeding Herd

US - USDA June Hogs and Pigs Report said the breeding herd was 3 per cent smaller on 1 June than a year earlier and the inventory of market hogs was 3.7 per cent lower, according to Ron Plain and Glenn Grimes.
calendar icon 26 June 2010
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The average of the pre-release trade forecasts were for a 3.5 per cent smaller breeding herd and a 3 per cent smaller market hog inventory than last year.

USDA said March-May farrowings were down 4.7 per cent compared to last year and they forecast summer farrowings to be down 2.3 per cent and fall farrowings down 0.6 per cent. Pigs per litter in March-May were up 2.1 per cent compared to last year.

USDA's numbers are not big surprises. The smaller market hog inventory could well boost nearby lean hog futures a bit on Monday. Farrowing intentions and pigs per litter were larger than expected and could put pressure on 2011 contract prices.

Russia has agreed to reopen their market to US poultry. They have been the top foreign buyer of US chicken for the last several years. Russia has regularly purchased over 1.5 billion pounds of US chicken annually. This should help reduce the supply of broiler meat on the US market and boost domestic meat prices.

Stocks of pork, beef and turkey in cold storage were well below year-earlier levels at the end of May. Frozen chicken stocks were up 9 per cent.

The national weighted average carcass price for negotiated hogs Friday morning was $78.66/cwt, $1.04 higher than the previous Friday. Regional average prices on Friday morning were: eastern corn belt $79.06, western corn belt $77.47, and Iowa-Minnesota $77.45/cwt. The top live hog price Friday at Sioux Falls was $56.50/cwt, up $1.50 from the previous Friday. Peoria topped at $53 on Friday and Zumbrota, MN had a top price of $55. The interior Missouri live top Friday was $54.25/cwt, the same as the previous Friday.

The pork cutout value rose after three weeks of decline. USDA's Thursday afternoon calculated pork cutout value was $84.26/cwt, up $1.48 from the previous Thursday. Bellies, hams, and butts were higher this week while loins were slightly lower.

This week's hog slaughter totaled 1.956 million head, down 2.7 per cent from the week before and down 3.7 per cent compared to the same week last year.

The average carcass weight of barrows and gilts slaughtered the week ending 12 June was 201 pounds, down 1 pound from the week before and up 2 pounds compared to a year ago. Iowa-Minnesota live weights last week averaged 270.6 pounds, up 1.9 pounds compared to a year earlier.

The July lean hog futures contract ended the week at $80.72/cwt, down 15 cents from the previous Friday. The August contract settled at $83.92, up $1.27 for the week. October closed the week $1.75 higher at $76.65/cwt and December ended the week at $73.20/cwt.

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