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US Swine Economics Report

by 5m Editor
22 September 2010, at 12:10am

US - On 24 September, 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 0.9 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 in September 2009. My estimates of the 1 September market hog inventory by weight groups are: 180 pounds and heavier 94.5 per cent, 120-179 pounds 96.4 per cent, 50-119 pounds 97.3 per cent, and under 50 pounds 98.6 per cent of a year earlier.

Slaughter of barrows and gilts was down 4.8 per cent during June-August. Imports of Canadian hogs for immediate slaughter was also down even more, so slaughter of US raised barrows and gilts was probably off about 4.5 per cent during June-August. This was 1.5 per cent lower than implied by USDA’s June report. Look for USDA to revise down the June market hog inventory and their estimate of both sows farrowed and pig crop during last winter (Dec-Feb).

In their last inventory report, USDA predicted that June-August farrowings would be 2.3 per cent smaller than a year ago and September–November farrowings would be 0.5 per cent lower than a year earlier. I estimate that summer farrowings were down 2.7 per cent. I am forecasting fall farrowings to be down 0.9 per cent and winter farrowings to be down 0.5 per cent compared to December-February 2010.

December-February sow slaughter was down 2.3 per cent and March-May was down 3.0 per cent, both in line with the smaller sow herd inventory. However, June-August was down 15.7 per cent from a sow herd that was only 3 per cent smaller compared to 12 months earlier. The drop in sow slaughter likely would be a bit less when adjusted for fewer Canadian sows coming south for slaughter.

I believe pigs per litter were up 1.9 per cent this summer. My estimate is the June-August pig crop was 99.1 per cent of a year earlier. Feeder pig imports during June-August were likely 10 per cent or so below last summer’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 fourth quarter hog slaughter will be roughly 3 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues at year-earlier levels. I expect daily hog slaughter during the first quarter of 2011 to be 1-2 per cent lower than the number slaughtered in January-March 2010. (There is one extra slaughter day in the first quarter of 2011, so total slaughter should be close to the year-ago level.) I expect live hog prices to average close to $55/cwt ($73/cwt carcass) in the fourth quarter of 2010 and $57/cwt ($76/cwt carcass) in the first quarter next year.