The US Department of Agriculture's Quarterly Hogs and Pigs Report, released yesterday, indicates the market hog inventory increased by three per cent from one year ago while the breeding inventory increased by one per cent.

Tyler Fulton, the Director of Risk Management with h@ms marketing Services, says the biggest news out of this report was the anticipated increase in the heavy weight market hog category which implies more price pressure than would have been thought which is likely to push the futures price a bit lower.

Tyler Fulton-h@ms marketing Services

The most recent numbers that we've seen to date, so let's say this week and the past week, we're generally on pace for about a two and a half per cent increase over last year's levels.

The report actually suggested that we'd be looking at close to a four per cent increase so the expectation is actually, for the next several weeks, to not only grow at the pace of last year but beyond the pace of last year to account for these extra hogs that showed up on the survey.

These hogs that we're dealing with today are easily managed with the three new plants that are already operating this year compared to last year but really the question is whether or not we're going to be able to maintain the growth trajectory that build in the new plant capacity at a pace quick enough that can offset the pace of growth that we expect based on these results.

Mr Fulton says we're looking at US daily hog slaughters that exceed 2.6 million, easily a record, beating the old record by about 100 thousand so demand for pork will be critical to move this extra production.

He says the question will be at what price and suggests, if demand continues to grow as it has for the past several months, it's possible we won't have to make major price concessions.