USDA's June 'Hogs and Pigs' Report said the total inventory of hogs on US farms at the start of June was down 4.7 per cent from 12 months earlier. (See Table 1 below) The trade was expecting a 3.0 per cent decrease. USDA said the market hog inventory was 5.1 per cent smaller than a year ago and the number of hogs kept for breeding was down 0.6 per cent. The average of the pre-release trade estimates were for a 1.6 per cent increase in the swine breeding herd and a 3.4 per cent decrease in the market hog inventory.

Table 1. Hog inventories on 1 June, US
	2014 as % of 2013
All hogs and pigs	95.3
Kept for breeding	99.5
Market hogs	94.9

USDA made downward revisions to past inventory estimates to bring them in line with hog slaughter. USDA lowered their previous estimate of the December market hog inventory by 1,250,000 head (2.0 per cent) and lowered their estimate of the March market hog inventory by 410,000 head (0.7 per cent).

USDA decreased the reported number of sows farrowed during March-May 2013 by 10,000 litters (0.4 per cent). They lowered June-August 2013 farrowings by 12,000 litters (0.4 per cent) and they lowered September-November 2013 farrowings by 102,000 litters (3.5 per cent).

USDA said spring (March-May) farrowings were down 0.3 per cent from a year ago. They said farrowing intentions for summer (June-August) are up 0.1 per cent compared with a year ago and fall (September-November) 2014 farrowings are likely to be up 3.6 per cent compared to 12 months earlier. (See Table 3) Spring farrowings were 2.8 per cent lower than trade expectations and 2.7 per cent lower than forecast made by the March inventory survey. USDA's forecast of summer farrowing intentions is 2.0 per cent below pre-release expectations and 1.9 per cent lower than the March report predicted. Fall farrowing intentions are 1.0 per cent above the trade forecast. USDA says the breeding herd is down 0.7 per cent. The number of litters to be farrowed in the next six months is expected to be up 1.8 per cent.

It is worth noting that by lowering fall 2013 farrowings by 102,000 litters and lowering spring farrowings by 87,000 litters while leaving winter farrowings unchanged, they are saying that fall farrowings were down 3.7 per cent and spring farrowings were down 0.3 per cent but winter farrowings were up 2.8 per cent. That seems an unlikely relationship to me. Dr Plain expects some downward revision in winter farrowings in the next report.

The PED virus is having a big impact of baby pig survival. The number of pigs per litter during March-May, 9.78 head, was down 5.1 per cent from a year ago, which is slightly better than the 5.5 per cent decline in the previous quarter. The trade was expecting a 4.8 per cent decrease. Spring farrowings were down 0.3 per cent but with 5.1 per cent fewer pigs per litter, the winter pig crop was down 5.4 per cent, which is well below the pre-release trade forecast of down 2.3 per cent.

USDA's survey indicated the number of market hogs weighing 180 pounds or more on June 1 was down 3.8 per cent compared with 12 months earlier. (See Table 2) It looks like daily barrow and gilt slaughter in June was down 4.0 per cent compared to a year ago. The 120-179 pound market hog inventory was down 3.9 per cent from a year ago. The 50-119 pound inventory group was down 5.9 per cent from a year earlier. The inventory of pigs weighing less than 50 pounds also was down 5.9 per cent compared to a year earlier.

Table 2. Market hogs on farms on 1 June, US
Weight Category	2014 as % of 2013
Weight category:
-under 50 pounds	94.1
- 50-119 pounds	94.1
- 120-179 pounds	96.1
- 180 pounds and over	96.2
Pig crop:
- March-May	94.6
Pigs per litter:
- March-May	94.9

Based on the market hog inventory and the expectation of a slow decline in live hog imports, our forecast is for a decrease of 4.3 per cent in third quarter 2014 daily hog slaughter. With this level of pork production, we expect 51-52 per cent lean hogs to average in the mid $90s live and Iowa-Minnesota negotiated sales to average close to $127 per cwt on a carcass weight basis.

For the fourth quarter of 2014 we expect hog slaughter to be down 4.8 per cent on a daily basis with 51-52 per cent lean hogs averaging in the upper $70s/cwt live and Iowa hogs averaging around $103 per cwt on a carcass basis.

With the number of litters farrowed expected to be up 0.1 per cent this summer and pigs per litter decreasing by 1.5 per cent (Dr Plain's guess), the summer pig crop is likely to be 1.4 per cent smaller than a year earlier. We are forecasting first quarter 2015 daily slaughter to be down 0.5 per cent compared to a year ago. Look for carcass prices of barrows and gilts to average in the low $90s per cwt.

The forecast 3.6 per cent increase in fall farrowings should be offset by a slight decrease in litter size to yield a fall pig crop that is up about 2.5 per cent compared to a year-earlier. We are forecasting second quarter 2014 hog slaughter to be up 2.6 per cent on a daily basis.

Table 3. Sows farrowed and farrowing intentions, US
	2013 as % of 2012
March-May 2013	95.1
June-August 2013	98.7
September-November 2013	96.3
	2014 as % of 2013
December-February 2014	102.8
March-May 2014	99.7
June-August 2014	100.1
September-November 2014	103.6

Dr Plain's estimates of slaughter and prices for the next four quarters are in Table 4.

Table 4. Commercial hog slaughter and barrow and gilt price by quarter
		Comm. hog slaughter			Barrows and gilts, price/cwt
Year & quarter		Million head	Change from year ago %		51-52% lean live	Iowa-Minn base carcass	Non-packer-sold net carcass
			Monthly	Daily
2009	1	28.503	-3.70%	-2.20%	$42.11	$57.23	$60.43
	2	27.072	-3.1	-3.1	42.74	57.32	61.76
	3	28.428	-0.9	-0.9	38.90	51.43	56.68
	4	29.615	-2.0	-2.0	41.20	54.98	57.64
	Year	113.618	-2.4	-2.0	41.24	55.23	59.11
2010	1	27.630	-3.10%	-3.10%	$50.41	$66.81	$68.32
	2	26.074	-3.7	-3.7	59.60	79.04	79.42
	3	26.930	-5.3	-5.3	60.13	79.44	80.70
	4	29.626	0.1	0.1	50.11	65.20	69.26
	Year	110.260	-3.0	-3.0	55.06	72.67	74.47
2011	1	27.483	-0.50%	-2.10%	$59.94	$79.28	$80.63
	2	26.110	0.1	0.1	68.80	91.80	92.39
	3	27.379	1.7	1.7	71.06	94.03	95.74
	4	29.888	0.9	2.5	64.66	85.03	87.39
	Year	110.860	0.5	0.5	66.11	87.54	89.04
2012	1	28.105	2.30%	2.30%	$62.66	$84.78	$86.56
	2	26.661	2.1	2.1	61.79	85.45	87.76
	3	27.965	2.1	3.8	61.43	83.15	87.69
	4	30.433	1.8	0.2	58.63	79.93	82.87
	Year	113.163	2.1	2.1	61.13	83.36	86.23
2013	1	27.874	-0.80%	0.80%	$59.03	$80.17	$83.45
	2	26.778	0.4	0.4	65.46	89.33	91.53
	3	27.667	-1.1	-2.6	70.56	95.36	97.90
	4	29.808	-2.1	-2.1	61.10	82.36	84.13
	Year	112.126	-0.9	-0.9	64.11	86.87	89.57
2014	1	27.134	-2.60%	-2.60%	$68.69	$94.97	$ 93.22
	2*	25.585	-4.4	-4.4	80 - 90	114.58	113.59
	3**	26.459	-4.3	-4.3	92 - 96	125 - 130	125 - 130
	4**	28.348	-4.8	-4.8	72 - 80	98 - 108	99 - 109
	Year **	107.525	-4.1	-4.1	77 - 85	105 - 115	105 - 115
2015	1**	27.000	-0.50%	-0.50%	$65 - 72	$ 88 - 89	$ 90 - 100
	2**	26.241	2.6	2.6	66 - 73	89 - 99	91 - 101
	3**	27.362	3.4	3.4	61 - 69	83 - 93	85 - 95
	4**	29.957	5.7	-5.7	55 - 63	75 - 85	77 - 87
	Year**	110.557	2.8	2.8	61 - 69	83 - 93	85 - 95
* estimate; ** forecast