The total inventory of hogs and pigs was down 2.7 per cent. The breeding inventory was a bit smaller than trade expectations and the market hog inventory was a bit larger than the average of trade forecasts.

USDA said December-February farrowings were down 3.0 per cent and forecast March-May farrowings to be down 2.9 per cent and June-August farrowings to be down 4.0 per cent. USDA’s forecast of summer farrowings was well below the trade forecast. Pre-release trade estimates put December-February farrowings at down 3.4 per cent, forecast March-May to be down 2.0 per cent and June-August down 1.5 per cent.

Pigs per litter in the December-February quarter averaged 9.48 head, up 2.6 per cent compared to a year earlier, the 22^nd consecutive quarter above year-ago levels, and the biggest year-over-year increase since the summer of 1992.

USDA said the inventory of market hogs weighing 60-179 pounds was down 2.5 per cent on 1 March. If correct, daily hog slaughter during the second quarter should be down 2.5 per cent plus the drop in slaughter hogs from Canada. Look for hog slaughter during April-June to average at least 4 per cent lower than last year and carcass hog prices to average in the mid to upper $60s.

USDA said the inventory of market hogs weighing less than 60 pounds was down 3.1 per cent on 1 March, implying hog slaughter during the third quarter of 2009 will be down roughly 5% given the sharp downward trend in hog imports from Canada. I expect third quarter carcass hog prices to average close to $70/cwt.

I expect 2009 hog slaughter will be down about 4 per cent and carcass hog prices in 2009 will average close to $63/cwt. Unfortunately, the cost of production could average close to $69/cwt on a carcass basis, resulting in a loss of $6/cwt or roughly $12 per head.

Perhaps the most interesting numbers in the March report is the mis-match in market hog numbers. USDA says the December inventory of pigs weighing less than 60 pounds was 5.5 per cent below year-earlier levels but the March inventory of hogs weighing over 60 pounds is only down 2.5 per cent. Imports of feeder pigs from Canada were down 35 per cent during December-February. What explains the difference? I don’t know.