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US Swine Economics Report

by 5m Editor
2 July 2009, at 8:03am

US - USDA's latest survey of the US swine herd said the market herd was down 1.9 per cent on 1 June and the breeding herd was down 2.7 per cent compared to 12 months earlier, writes Ron Plain in his Swine Economics Report.

The total inventory of hogs was down 2.0 per cent. The breeding inventory was smaller and the market hog inventory was a bit larger than the average of trade forecasts.

USDA said March-May farrowings were down 2.7 per cent and forecast June-August farrowings to be down 3.3 per cent and September-November farrowings to be down 2.2 per cent. Pre-release trade estimates put March-May farrowings at down 2.7 per cent, forecast June-August to be down 3.3 per cent and September-November down 2.5 per cent.

Pigs per litter in the March-May quarter averaged a record 9.61 head, up 2.5 per cent compared to a year earlier, and the 23rd consecutive quarter above year-ago levels. The last four quarters have averaged 2.45 per cent more pigs per litter, offsetting much of the decline in farrowings.

Perhaps the most interesting numbers in the June report are the young pig inventories. USDA says the June inventory of pigs weighing less than 60 pounds was 2.4 per cent below year-earlier levels, but the March-May pig crop was only down 0.3 per cent. Imports of feeder pigs from Canada were down 25 per cent during March-May. Thus, Canada accounted for 90 per cent of the drop in our inventory of light weight pigs.

USDA said the inventory of market hogs weighing 60-179 pounds was down 2.2 per cent on 1 June. If correct, daily hog slaughter during the third quarter should be down 2.2 per cent plus the drop in slaughter hogs from Canada. Look for hog slaughter during July-September to average at least 3 per cent lower than last year with carcass hog prices averaging in the mid to upper $50s.

USDA said the inventory of market hogs weighing less than 60 pounds was down 2.4 per cent on 1 June, implying hog slaughter during the fourth quarter of 2009 will be down roughly 3 per cent given the sharp downward trend in hog imports from Canada. I expect fourth quarter carcass hog prices to average in the low to mid $50s.

Hog slaughter will be down 3-4 per cent this year and hopefully even more in 2010. Unfortunately, there is no end in sight to the string of financial losses plaguing producers.

Further Reading

- You can view the USDA Quarterly Hogs and Pigs Report - June 2009 by clicking here.