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Ron Plain

Hog producers bred 3% fewer gilts and sows during March than a year earlier. This was the tenth consecutive month with fewer sows and gilts bred than a year earlier. This is another indicator suggesting slaughter should decline from a year earlier shortly unless productivity growth offsets the decline in numbers bred.

The April 1 Hogs and Pigs Report showed the number of pigs farrowed in March was down 3.4% from a year earlier. The inventory of sows and gilts held for breeding April 1 was down 3.1%. This is a bit of a reversal because the breeding herd on March 1 was down 4% from a year earlier. The good news is the breeding herd on April 1 was below a month earlier by 0.7%. This agrees with our gilt and sow slaughter data that indicates producers continued to reduce the breeding herd at least at a slow rate.

The number of litters farrowed during March was down 3.4% from 12 months earlier. This is very consistent with the second quarter farrowing intentions released in the March report. The number of pigs per litter during March at 8.85 was up 0.6% from a year earlier. This number of pigs per litter is very close to the January and February levels.

Slaughter during April on a daily basis was down about 1.1%. The October pig crop in 2002 was 2.6% below a year earlier. Therefore, slaughter continues to run some above expectations based on pig crop and inventories.

Slaughter this week under Federal Inspection was estimated at 1803 thousand head---down 3.8% from a year earlier. We do not know how much of the decline in slaughter this week was due to packer slowing chain speed to try to improve margins or how much of the reduction was due to tight hog supplies. We believe the odds favor both factors contributed to the decline.

The slow down in slaughter pushed prices lower this week at some markets from levels late Friday. The top live prices at select markets Friday morning were: Peoria $36.50, St Paul $37, Sioux Falls N/A, and interior Missouri $36.25.

The average carcass price for 185# carcasses with 0.9 - 1.1" back fat 6 square inch loin 2" deep by area was: Western Cornbelt $51.50, eastern Cornbelt $52.73, Iowa - Minnesota $51.47, and nation $52.19.

We are very hopeful that we finally reached that time where slaughter will be below a year earlier and prices will continue to show seasonal improvement most weeks for the next several weeks.

Feeder pig prices this week were mixed from 2 weeks ago. In general the prices this week were basically steady with 14 days earlier. Prices per cwt by weights groups at United Producers tel-o-auction were: 40-50# $89.50-92, 50-60# $76-92, 60-70# $72.50 and 70-80# $66-72 per cwt.