Swine Economics Report

US - On 28 March, USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his latest "Swine Economics Report".
calendar icon 27 March 2013
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My estimates are that the breeding herd is 1.2 per cent larger than a year ago; the market hog inventory is 0.8 per cent larger; and the total herd is 0.8 per cent larger than in March 2012. My estimates of the 1 March market hog inventory by weight groups are: 180 pounds and heavier 101.9 per cent, 120-179 pounds 99.8 per cent, 50-119 pounds 100.4 per cent, and under 50 pounds 101.1 per cent of a year earlier.

December-February sow slaughter was down 1.1 per cent compared to a year earlier. The number of Canadian sows imported for slaughter was up 3.4 per cent. Adjusted for imports, slaughter of US sows was down 1.9 per cent, out of a sow herd that was 0.2 per cent larger than 12 months earlier. Our gilt slaughter data shows more gilts were retained this winter than last.

I anticipate no major revisions of USDA's December hog inventory estimates. Slaughter of barrows and gilts during December-February was down 0.3 per cent from a year earlier. USDA's December report implied fall slaughter would be up 0.1 per cent.

In their last inventory report, USDA predicted that December-February farrowings would be unchanged compared to 12 months earlier and March-May farrowings would be 1.9 per cent lower than a year earlier. I think that winter farrowings were down 0.0 per cent. I'm forecasting spring farrowings to be down 1.2 per cent and June-August farrowings up 0.7 per cent compared to last summer.

I'm estimating pigs per litter to have been up 1.1 per cent this winter. My estimate is the December-February pig crop was 101.1 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 very close to year-ago levels. I expect hog slaughter during the third quarter of 2013 to be up 0.6 per cent on a daily basis compared to the number slaughtered in July-September 2012.

Look for fourth quarter 2013 slaughter to be up 0.6 per cent. I expect first quarter 2014 daily slaughter to be up 1.9 per cent compared to this year.

I expect live hog prices to average close to $65/cwt ($85/cwt carcass) in the second quarter of 2013 and $66/cwt ($86 carcass) in the third quarter. I'm looking for fourth quarter of 2013 to be close to $58/cwt ($76/cwt carcass) with $59/cwt ($78/cwt carcass) price average in the first quarter of 2014.

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