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Ron Plain

This Friday USDA will release their next quarterly survey of the nation's hog inventory. My calculations indicate the breeding herd is down 4% from a year ago and the market hog inventory is 2% smaller than on June 1, 2002.

In their March report, USDA predicted both March-May farrowings and June-August farrowings to be down 3% compared to a year earlier. I believe spring farrowings were actually 3.5% smaller than a year ago. I'm forecasting summer and fall farrowings to be 3% smaller than a year earlier. I believe that pigs per litter this spring were close to last year's level, making the March-May pig crop also 3.5% smaller than a year ago.

My estimates of the June 1 market hog inventory by weight groups are: 180 pounds and heavier 99%, 120-179 pounds 98%, 60-119 pounds 98%, and under 60 pounds 97%. Hog slaughter during the first three weeks of June was 0.7% below the same weeks last year. Since the number of slaughter hogs imported from Canada each week has been running several thousand head below year ago levels, U.S. hog slaughter during the first three weeks of June probably would have been down only 0.4% had we received the same number of Canadian slaughter hogs as last year. Hog slaughter during the next 2 weeks will need to be 2.3% below year-ago levels to make my 99% estimate of the 180 pound plus inventory group correct.

My estimate of the number of hogs in the 60-179 weight groups imply that third quarter hog slaughter will be 2.3% below year ago levels, assuming a continuing decline in the number of Canadian slaughter hogs coming south. I expect slaughter actually will be down even more because hog producers accelerated marketings of hogs during the third quarter of 2002. Live hog prices should average close to $42 in the third quarter this year. If my light weight inventory is correct, fourth quarter 2003 hog slaughter is likely to come in 2-3% below the number slaughtered in the fourth quarter of 2002. If so, look for October-December hogs to average close to $38/cwt on a live basis.

Don't look for USDA to make any major revisions in their past numbers. Since the first of March, hog slaughter has been within 1% of the level implied by the March quarterly report.