Trends . . .   QUARTERLY  HOGS  AND  PIGS  BELOW  A  YEAR  AGO

On Friday, June 26^th, USDA-NASS released the June 1 Quarterly Hogs and Pigs report, which reported the total number of hogs and pigs in the U.S. at 66.1 million head, a 2 percent or 1.3 million head year-to-year decline.  According to the report, it appears producers are in the initial stages of a herd contraction.  Producer intentions suggest breeding herd reductions in the coming months, which may become larger than USDA reported given current market conditions.

CATTLE  BYPRODUCT  VALUES

The byproduct value is comprised of the total value of all the non-meat items gathered from an animal after processing such as liver, tallow and hide.  Those items are an essential part of beef packer returns and therefore impact cattle prices.  Last year, byproduct values soared to record highs driven by high oil and feedstuff prices as well as a low U.S. dollar.  However, as the global and domestic economy collapsed so did the value for those products.  Although, recent increases in oil and feedstuff prices have provided some support to byproduct values, large declines compared to 2008 persist.

COW  SLAUGHTER

Last year, in response to a number of factors (i.e. drought and rising costs) the U.S. beef cattle industry reduced the breeding herd.  The dairy industry which has been facing rising costs and low milk prices since late last year, has begun contracting this year.  Thus, total cow slaughter so far this year has averaged above last year, due to a larger number of dairy cows in the slaughter mix.  However, smaller numbers of beef cows in the mix have helped to offset the annual increase in dairy cow slaughter.