We know of several specific sow units emptying. Some are going out of business others are de - popping for health and economic reasons. We can list 25,000 plus sows we know of gone or going. We are not delusionary we don't know every farm if we can list 25,000 sows we expect multiply by 4 or 100,000 is what is happening. The sober reality of $50 per head losses over the next few months will crush many who have not fully back filled their equity hole made in the last down turn.

Much of the present liquidation is with sew and feeder pig producers. Many had pricing contracts. When the market has gotten weaker; several buyers have found excuses not to honor their deals. Unfortunately, this confirms the saying of a colleague of ours "Nobody goes broke if they can help it." Every downturn, the same story = sow herds quitting.

Not only year over year sow slaughter has picked up, but gilt replacement has slowed down. The net effect we expect the North American sow herd is decreasing 5,000 to 10, 000 per week.

Market hog numbers will decline further by late fall - new year as only people who can't figure are keeping belly ruptures, junk pigs, etc… alive. The feed cost of raising those pigs in these hog market prices is prohibitive. We expect a 1% - 2% decline in hog numbers with these pigs being eliminated. The customers of our largest genetic competitor who are famous for genetic defects will have customers with a much higher percentage.

The hottest summer on record will lead in our opinion a lower litter size and less farrowings than would have been expected, seasonal infertility will be magnified = less pigs. Also we expect sow mortality was higher this summer than normal = less pigs.

Summary

Less sows, less gilts, less junk pigs, higher seasonal infertility = fewer pigs coming forward. The war of attrition is ongoing projected losses of $50 per head for the next few months are a grim reality. Our opinion we first gave in our speech first part of July at the National Pork Industry Conference in Wisconsin, is that the summer of 2013 will have the highest hog prices in U.S. history. June lean hogs closed over $1.00 last week as attrition continues expect further increases in summer and fall 2013 futures. The hell is getting there.