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US Swine Economics Report

by 5m Editor
23 September 2009, at 7:00am

US - On 25 September, USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his Swine Economics Report.

My estimates are that the breeding herd is 1.8 per cent smaller than a year ago, the market hog inventory is 0.9 per cent smaller, and the total herd is 1.0 per cent smaller than on 1 September 2008.

Slaughter of barrows and gilts was down roughly 1.1 per cent during June-August due in part to a 29 per cent drop in slaughter hogs imports from Canada. Slaughter of US raised hogs was about 1 per cent higher than expected based on the June inventory report.

My estimates of the 1 September market hog inventory by weight groups are: 180 pounds and heavier 99.0 per cent, 120-179 pounds 99.0 per cent, 60-119 pounds 99.2 per cent, and under 60 pounds 99.0 per cent of a year earlier.

In their last inventory report, USDA predicted June-August farrowings would be 3.3 per cent smaller than a year earlier and September–November farrowings would be down 2.2 per cent. I’m estimating summer farrowings actually were down only 2.8 per cent and fall farrowings will be down 2.0 per cent. I’m forecasting winter farrowings to be down 3.0 per cent compared to December-February 2009. Despite a lot of red ink, 2009 sow slaughter has been low. December-February, sow slaughter was 7.4 per cent lower than a year earlier, March-May sow slaughter was down 15.2 per cent, and June-August was down 6.2 per cent compared to 12 months earlier.

I believe that mild weather resulted in pigs per litter being up 2.4 per cent this summer. My estimate is the June-August pig crop was 99.5 per cent of a year earlier. Feeder pig imports during June-August were 21 per cent below last summer’s level, so the light weight inventory should be down more than the pig crop.

My estimate of hogs in the 60-179 weight groups implies that fourth quarter hog slaughter will be 1-2 per cent below year-ago levels, if as expected the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $34/cwt ($43/cwt carcass) in the fourth quarter of 2009.

I expect hog slaughter during the first quarter of 2010 to be 1-2 per cent lower than the number slaughtered in January-March 2009. If so, expect first quarter 2010 hog prices to average close to $38/cwt on a live basis and $49/cwt on a carcass basis.