US Swine Economics Report

by 5m Editor
28 June 2012, at 12:46pm

US - On 29 June, USDA will release the results of their latest survey of the US swine inventory. My estimates are that the breeding herd is 0.2 per cent larger than a year ago; the market hog inventory is 1.5 per cent larger; and the total herd is 1.3 per cent larger than in June 2011, writes Ron Plain in his Swine Economics Report.

My estimates of the 1 June market hog inventory by weight groups are: 180 pounds and heavier 100.0 per cent, 120-179 pounds 102.3 per cent, 50-119 pounds 102.4 per cent, and under 50 pounds 100.8 per cent of a year earlier.

March-May sow slaughter was down 2.5 per cent out of a sow herd that was 0.6 per cent larger than 12 months earlier. We believe the lower sow slaughter was partially balanced by reduced gilt retention. Our gilt slaughter data shows fewer gilt retained this spring than last.

Slaughter of barrows and gilts during March-May was up 2.7 per cent from a year earlier. USDA’s March report implied spring slaughter would be up about 2 per cent. USDA may revise upward a bit the size of the September-November pig crop, but I believe the mild weather and faster growth rates accounts for a good part of the higher-than-expected April-May hog slaughter and the lower-than-expected June slaughter.

In their last inventory report, USDA predicted that March-May farrowings would be down 0.9 per cent and June-August farrowings would be 1.6 per cent lower than a year earlier. I agree that spring farrowings were down 0.9 per cent. I’m forecasting summer farrowings to be down 1.5 per cent and September-November farrowings up 0.2 per cent compared to last fall.

I’m estimating pigs per litter to have been up 1.7 per cent this spring. My estimate is the March-May pig crop was 100.8 per cent of a year earlier.

My estimate of hogs in the 50-179 weight groups implies that daily hog slaughter during the third quarter will be 2.3 per cent above year-ago levels. I expect hog slaughter during the fourth quarter of 2012 to be 2.5 per cent higher (up 0.9 per cent on a daily basis) than the number slaughtered in October-December 2011 due to one extra slaughter day this year.

Look for first quarter 2013 slaughter to be down 1.4 per cent (daily up 0.2 per cent) due to one fewer slaughter day. I expect second quarter 2013 slaughter to be up 2.0 per cent.

I expect live hog prices to average close to $67/cwt ($88/cwt carcass) in the third quarter and $58/cwt in the fourth quarter of 2012; $60/cwt ($78/cwt carcass) in the first quarter of 2013; and $63/cwt ($83/cwt carcass) in the second quarter of 2013.