My estimates are that the breeding herd is 0.3 per cent smaller than a year ago; the market hog inventory is 0.2 per cent larger; and the total herd is 0.2 per cent larger than in March 2010. My estimates of the 1 March market hog inventory by weight groups are: 180 pounds and heavier 99.3 per cent, 120-179 pounds 99.6 per cent, 50-119 pounds 100.7 per cent, and under 50 pounds 100.8 per cent of a year earlier.

Daily slaughter of barrows and gilts was up 0.7 per cent during December-February. Imports of Canadian barrows and gilts for immediate slaughter was little changed from a year earlier, so slaughter of U.S. raised barrows and gilts also was up 0.7 per cent during December-February. USDA's December report implied winter slaughter would be down 0.4 per cent. Look for USDA to revise upward slightly the December market hog inventory and their estimate of both sows farrowed and pig crop during last summer (June-August).

In their last inventory report, USDA predicted that December-February farrowings would be 0.6 per cent smaller than a year ago and March-May farrowings would be 2.3 per cent lower than a year earlier. I agree that winter farrowings were down 0.6 per cent. I am forecasting spring farrowings to be down 2.0 per cent and summer farrowings to be unchanged compared to June-August 2010.

December-February sow slaughter was down 3.8 per cent. Imports of Canadian sows for slaughter during this period were down nearly 25 per cent. Thus, net slaughter of U.S. sows was up 0.9 per cent out of a sow herd that was 1.2 per cent smaller compared to 12 months earlier.

I believe pigs per litter were up 1.4 per cent this winter. My estimate is the December-February pig crop was 100.8 per cent of a year earlier. Feeder pig imports during December-February were 0.9 per cent or so below last fall's level, so the light weight inventory should be up a bit less than the pig crop.

My estimate of hogs in the 50-179 weight groups implies that daily hog slaughter during the second quarter will be roughly 0.2 per cent above year-ago levels, if the inflow of slaughter hogs from Canada continues close to year-earlier levels. I expect daily hog slaughter during the third quarter of 2011 to be 0.8 per cent higher than the number slaughtered in July-September 2010. I expect live hog prices to average close to $67/cwt ($89/cwt carcass) in the second quarter of 2011 and $66/cwt ($88/cwt carcass) in the third quarter. The futures market is much more optimistic.