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US Swine Economics Report

by 5m Editor
25 March 2009, at 8:53am

US - On 27 March USDA will release the results of their latest survey of the US swine inventory. My estimates are that the breeding herd is 1.9 per cent smaller than a year ago, the market hog inventory is 3.9 per cent smaller, and the total herd is 3.7 per cent smaller than on 1 March 2008, writes Professor Ron Plain in his Swine Economics Report.

Total slaughter of barrows and gilts was down nearly 2 per cent during December-February due to a 65 per cent drop in imports of slaughter hogs from Canada. Slaughter of US raised hogs was a bit higher than expected based on the December inventory report. Any revisions that USDA makes to their December inventory estimates are likely to be small.

In their last inventory report, USDA predicted December-February farrowings would be 3.3 per cent smaller than a year earlier and March-May farrowings would be down 1.6 per cent. I'm predicting winter farrowings actually were down 3.5 per cent and spring farrowings will be down 2.0 per cent. I'm forecasting summer farrowings will be down 1.0 per cent compared to June-August 2008. Declining feed prices in the second half of 2008 halted what had been a rapid reduction in the sow herd. December-February, sow slaughter was 7.4 per cent lower than a year ago.

I'm estimating that pigs per litter were up 2.4 per cent this winter, as it was the two previous quarters. My estimate is the December-February pig crop was 98.9 per cent of a year earlier. Feeder pig imports during December-February were 35 per cent below last winter's level, so the light weight market hog inventory should be down considerably more than the fall pig crop.

My estimates of the 1 March market hog inventory by weight groups are: 180 pounds and heavier 97.6 per cent, 120-179 pounds 95.5 per cent, 60-119 pounds 95.0 per cent, and under 60 pounds 96.4 per cent of a year earlier.

My estimate of hogs in the 60-179 weight groups implies that second quarter daily hog slaughter will be more than 5 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $52/cwt ($68.50/cwt carcass) in the second quarter of 2009.

I expect hog slaughter during the third quarter of 2009 to be 4 per cent lower than the number slaughtered in July-September 2008. If so, look for third quarter 2009 hog prices to average close to $53/cwt on a live basis and $70/cwt on a carcass basis.