My estimates are that the breeding herd is 0.1 per cent smaller than a year ago; the market hog inventory is 1.9 larger; and the total herd is 1.7 per cent larger than in March 2011. My estimates of the March 1 market hog inventory by weight groups are: 180 pounds and heavier 101.0 per cent, 120-179 pounds 101.5 per cent, 50-119 pounds 102.2 per cent, and under 50 pounds 102.3 per cent of a year earlier.

December-February sow slaughter was up 2.2 per cent out of a sow herd that was 0.4 per cent larger than 12 months earlier. Our gilt slaughter data shows less gilt retention this winter than last.

Slaughter of barrows and gilts during December-February was up 2.0 per cent from a year earlier. USDA's December report implied winter slaughter would be up 1.0 per cent. USDA will probably revise upward a bit the size of the June-August pig crop, but I believe the mild weather and faster growth rates accounts for a good part of the higher-than-expected winter hog slaughter.

In their last inventory report, USDA predicted that December-February farrowings would be up 0.8 per cent and March-May farrowings would be 0.9 per cent lower than a year earlier. There is a good chance that hot weather last summer slightly reduced the size of the winter pig crop. I believe winter farrowings actually were up 0.5 per cent. I'm forecasting spring farrowings to be down 0.6 per cent and June-August farrowings down 0.5 per cent compared to last summer.

I'm estimating pigs per litter to have been up 1.8 per cent this winter. My estimate is the December-February pig crop was 102.3 per cent of a year earlier.

My estimate of hogs in the 50-179 weight groups implies that daily hog slaughter during the second quarter will be 1.9 per cent above year-ago levels. I expect hog slaughter during the third quarter of 2012 to be only 0.6 per cent higher (up 2.2 per cent on a daily basis) than the number slaughtered in July-September 2011 due to one fewer slaughter day this year. Look for fourth quarter slaughter to be up 3.4 per cent (daily up 1.8 per cent) due to one extra slaughter day. I expect first quarter 2013 slaughter to be up 1.5 per cent.

I expect live hog prices to average close to $69/cwt ($91/cwt carcass) in the both the second quarter and third quarter of 2012; $63/cwt ($83/cwt carcass) in the fourth quarter of 2012; and $64/cwt ($85/cwt carcass) in the first quarter of 2013.