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.

As reported by USDA, as of June 1^st, the breeding herd was 5.97 million head, down 3 percent from a year ago and just slightly below the prior quarter.  Sow slaughter has averaged well below a year ago this year, therefore the breeding herd number was not expected to change much from the prior quarter and was in line with pre-report estimates.  Producers farrowed 3 percent less sows in the March to May quarter, but with another record high pigs per litter number of 9.61, the pig crop was just a tad smaller than last year.  Looking ahead, compared to a year ago, producers reported they intend to farrow 2 to 3 less sows this fall however, that number may actually be lower since the surveys were conducted during May and the market outlook as deteriorated since.

Slaughter hog supplies are forecast to be smaller in 2009, as the number of market hogs reported at 60.1 million head was down 2 percent (1.6 million head) from 2008.  Of note, the number of market hogs was up from the prior quarter, which further suggests producers are not retaining as many hogs as prior years. 

Also, below year ago imports of feeder pigs and slaughter hogs from Canada are expected to continue throughout 2009, further reducing the available of supply of slaughter hogs in the U.S. this year.

Current LMIC forecasts suggest U.S. hog slaughter for 2009 will be down about 4 percent from last year, but still the second largest ever.  Pork production should be about 3 percent smaller than 2008’s due to slightly heavier hog weights this year.  Tighter supplies should be supportive to hog prices, however current domestic and foreign demand for pork are lethargic, thus LMIC forecasts the 2009 slaughter hog prices will be down about 4 percent from last year.