On March 28 USDA will release the results of its latest survey of
"My calculations indicate the breeding herd is 1.0% smaller than a year ago," says
Plain expects USDA to revise upward estimates contained in last December's report.
"Hog slaughter during December-February was much higher than expected based on the December inventory report," he says. "A 30% rise in slaughter hog imports from
Expansion far from ending. In December, producers told USDA they'd up December-February farrowings by 2.4%. But they'd only boost March—May farrowings by 0.1%.
"I think winter farrowings were actually up 2.5% and I believe spring farrowings will be 1.0% larger than last year," says Plain. "I'm forecasting summer farrowings to be down 0.5% compared to June-August 2007. Producers are losing lots of money and winter sow slaughter was 3.3% higher than a year ago."
Productivity gains continue. "I'm estimating pigs per litter were up 0.7% this winter, making the December-February pig crop 103.2% of a year ago," says Plain. "Feeder pig imports from
Plain's estimates of the March 1 market hog inventories by weight groups are:
* 180 pounds and heavier 106.0%,
* 120-179 pounds 105.1%,
* 60-119 pounds 105.0%
* under 60 pounds 104.2% of a year earlier.
Plenty of hogs to keep pressure on prices. "My estimate of hogs in the 60-179 weight groups implies that second quarter hog slaughter will be 6% or so above year-ago levels, if the inflow of slaughter hogs from Canada continues to be above year-ago levels," he says. "Second quarter live hogs could average near $47 per cwt.
Plain expects third quarter 2008 hog slaughter to be nearly 5% larger than the number slaughtered in July-September 2007. "If so, look for third quarter 2008 hog prices to average close to $46 on a live basis," he says.