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US Swine Economics Report - 24th March 2003.

by 5m Editor
25 March 2003, at 12:00am

US - Regular report by Ron Plain on the US Swine industry, this week predicting Fridays USDA Pigs and Hogs report.

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USDA's will release their next quarterly survey of the nation's hog inventory on Friday afternoon March 28. My calculations indicate the breeding herd is down 4% from a year ago, but the market hog inventory is only 1% smaller than on March 1, 2002.

In their December report, USDA predicted December-February farrowings would be down 1% and March-May farrowings would be down 3% compared to a year earlier. I believe winter farrowings were actually 2% smaller than a year ago. I expect spring farrowings to be down 3% and summer farrowings to be 4% smaller than a year earlier. I believe that the number of pigs per litter this winter were close to year ago levels, making the December-February pig crop 2% smaller than a year ago.

My estimates of market hog inventory by weight groups are: 180 pounds and heavier 101%, 120-179 pounds 100%, 60-119 pounds 99%, and under 60 pounds 98%. Hog slaughter during the first three weeks of March was 1.5% above the same period last year. Since the number of slaughter hogs imported from Canada has been consistently running several thousand head below year ago levels, total hog slaughter during the next two weeks will have to be at or below year-ago levels to make my 101% estimate of the 180 pound plus inventory group correct.

My weight group estimates imply that second quarter hog slaughter will be 1% below year ago levels. Live hog prices should average close to $38 in the second quarter this year. If my light weight inventory is correct, third quarter 2003 hog slaughter is likely to come in 2% below the number slaughtered in the third quarter of 2002. If so, look for July-September hogs to average close to $40/cwt on a live basis.

USDA will have to make some upward revisions in their past numbers. Since the first of December, hog slaughter has been 646,700 head (2.2%) above the level implied by the December quarterly report. This gap would probably been 750,000 head were it not for the drop in imports of Canadian slaughter hogs in recent months.

Sow and gilt slaughter indicate the swine breeding herd is continuing to shrink. Hog prices should rise back to profitable levels sometime during May. Unfortunately, they will probably drop back into the red later in September.

5m Editor