On Friday March 30, USDA will release the results of its latest survey of the U.S. swine inventory.
"My calculations indicate the breeding herd is unchanged from a year ago, the market hog inventory is 2.4% larger and the total herd is 2.2% bigger than on March 1, 2006," says Ron Plain, University of Missouri livestock economist. "Although producers have had good returns during the last three years, I believe sharply higher corn prices have stopped breeding herd growth."
U.S. sow slaughter during December-February was up 5.3% compared to last winter, despite a sow herd that was only 1.3% larger on Dec. 1, 2006. Slaughter sow imports from Canada were only 2% more this winter than last.
Farrowing growth rate slows
For December's Hogs and Pigs Report, producers told USDA they'd hike December-February farrowings by 2.2%. They said they'd farrrow 0.5% more sows in March–May than in 2006. Plain estimates winter farrowings were up 2.1%. He agrees with USDA's findings that spring farrowings will be 0.5% larger than last year. "Summer farrowings will be the same as in June-August 2006," he forecasts.
Plain believes that pigs per litter this winter were up 0.8%, making the December-February pig crop 102.9% of a year ago. Feeder pig imports from Canada were up 4.9% this winter, so the light weight market hog inventory should be up a bit more than the pig crop implies.
Plain's estimates of the March 1 market hog inventory by weight groups are:
* 180 pounds and heavier 103.3%,
* 120-179 pounds 101.5%,
* 60-119 pounds 101.5%,
* Under 60 pounds 103.1% of a year earlier.
Hog slaughter was extremely light the first few days of March because of snow, but the last two weeks have been up 5.9% compared to 2006.
Second quarter hogs could average near $50
"My estimate of the number of hogs in the 60-179 weight groups implies that second quarter hog slaughter will be 1.5% above year-ago levels," says Plain. "Slaughter could be a bit higher if the inflow of market hogs from Canada continues running above year-ago levels. I expect live hog prices to average close to $50 per cwt. in the second quarter of 2007.
"If my estimate of the light weight inventory is correct, third quarter 2007 hog slaughter should be a little over 3% larger than the number slaughtered in July-September 2006," he adds. "If so, look for third quarter 2007 hog prices to average close to $47 on a live basis, down $3 from a year earlier."