Hog Outlook: US Market Hog Inventory Larger Than a Year Ago

US - The recent September hogs and pigs report said the US market hog inventory was 0.3 per cent larger than a year ago and the breeding herd was up 0.4 per cent, write Ron Plain and Scott Brown.
calendar icon 7 October 2013
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Summer farrowings were down 0.1 per cent with pigs per litter up 2.0 per cent to a new up record 10.33 pigs per litter. The summer pig crop was 1.9 per cent larger than a year ago. However, the inventory of market hogs weighing less than 120 pounds was up only 1.0 per cent.

USDA said farrowing intentions for fall are up 0.4 per cent and winter farrowings are expected to be up 0.9 per cent compared to a year earlier.

USDA said the 180 pound and heavier market hog inventory was down 3.5 per cent on the first day of September. Daily hog slaughter during September was down a whopping 9.2 per cent.

Analysts were expecting evidence of the impact of PED virus in the USDA numbers. The record pigs per litter implies no impact from PEDv. The smaller inventory of lightweight market hogs relative to the pig crop implies increased post weaning death loss.

Based on this report, I expect 2013 hog slaughter to be 0.1 per cent lower than last year and I expect 2014 hog slaughter to be up 2.0 per cent compared to this year.

Iowa State University estimates that the typical market hog sold during August cost $71.03/cwt to raise. This was lower than the month before for the seventh consecutive month. ISU calculates that hogs sold during August earned a profit of $7.64 per head. This was the third profitable month in a row.

Testing data from the National Animal Health Laboratory Network says that as of 22 September, the Porcine Epidemic Diarrhea virus has been found in 684 swine premises in 17 states. This is an increase of 40 locations from the week before. There is an unknown amount of double counting in this data.

Because of a lapse in federal government funding, USDA stopped issuing market reports on 1 October. Consequently, there is little data available on current livestock prices, meat prices, weights or slaughter.

The only hog price data available is for the small number of hogs that move through the traditional auction markets. Peoria had a live price top this morning of $62/cwt, down $1 for the week. Zumbrota, MN was also a $1 lower with a top at $60/cwt. Missouri country markets were $2.25 lower with a top at $64.50/cwt of live weight.

Packers are looking for ways to price hogs should the government report shutdown continue into next week. Beginning Monday, Tyson is planning to start pricing hogs off of the Urner-Barry meat price sheet.

The October lean hog futures contract settled at $91.85/cwt today, down $1.07 from the previous Friday. December hog futures ended the week at $87.62/cwt, down 50 cents from the week before. February hogs settled at $89.85. April close at $90.32/cwt.

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