The results of Dow Jones’ pre-report survey of livestock analysts appear below. We would call the expected changes quite modest in light of this year’s cost levels and significant red ink.

The surveyed analysts expect a modest 0.9 per cent reduction in market pig inventories, implying slightly lower slaughter totals over the next 5-6 months. The larger reduction are in the light-weight categories meaning the reductions will be larger toward the end of the 6-month marketing horizon. The expected 0.5 per cent increase in the180 lb. and over inventory compares to an increase of 0.9 per cent in recent slaughter total. This year’s December contained 15 full slaughter weekdays and four full Saturdays. Comparing to last year is a trick since there were not four full Saturdays before Christmas —Christmas Eve fell on a Saturday and thus saw only about 25,000 head processed. We dropped last Saturday’s total from the tally in order to compare equal numbers of days. Should the actual 180-plus number come in at +0.5 per cent, we’d say it is close enough to he actual inventory of these near market-ready hogs back on 1 December.

You have seen much written — in these pages and by others — about how the breeding herd may have been changing this year. The surveyed analysts’ average of 99.3 per cent would put the 1 December herd at 5.762 million head, down 41,000 from one year ago and 26,000 from 1 September. The 5.762 million would be the fourth lowest breeding herd inventory ever and the smallest since 5.760 million were counted back in March 2010.

The slaughter of US sows (ie. imports of Canadian sows are deducted from the total) has been just over 3,000 head lower from 1 September through 8 December than it was one year ago. Total sow slaughter and the slaughter of US sows were sharply higher in September and early October but have fallen below last year’s level since mid-October. Sows are only part of the story, though. Based on data from the University of Missouri, gilt slaughter as a per cent of total barrow and gilt slaughter has been down .3 per cent this year versus last year. When combined with larger slaughter this year, that means the just over 100,000 more gilts were withheld from slaughter in 2012 — assuming that the pigs surviving to market weight are comprised of equal numbers of barrows and gilts. Logic says that the sow herd should have contracted but it appears that there were enough females available to actually grow it slightly.

And just how useful is the size of the breeding herd for predicting slaughter? Not very. As can be seen below, the pig crop and hog slaughter have kept increasing as the US breeding herd has declined. In fact, the correlation between slaughter and the breeding herd is –.59. Not only are they not highly correlated, the relationship is actually negative!. The coefficient for slaughter and the lagged pig crop is +.73 — the right sign but still not particularly high. There are many other factors — seasonality for one — that help determine slaughter numbers. Why the low correlation with the breeding herd? Rising productivity (breeding efficiency, litter size) is the big driver. In addition, the US survey asks about “Hogs kept for breeding“ without specifying their sex or their age. Artificial insemination has meant a higher proportion of females but, where gilts were once selected from the population of market hogs, they are now produced by specialized female lines and may be “kept for breeding“ from a very early age. Inclusion of these younger animals would actually inflate that breeding herd number meaning that the true relation might actually be even more negative.

Quarterly Breeding Herd, Pig Crop and Hog Slaughter