March 28, 2013
April 5, 2013

USDA’s quarterly Hogs and Pigs report showed U.S. hog farmers starting to expand production, a move that livestock analysts said will be bearish for hog prices.

United States inventory of all hogs and pigs on March 1, 2013 was 65.9 million head, up 1 percent from a year ago but down 1 percent from December 1, 2012.

Breeding inventory, at 5.83 million head, was up slightly from last year and up slightly from the previous quarter. Market hog inventory, at 60.1 million head, was up 2 percent from last year, but down 1 percent from last quarter.

One number that did surprise analysts on a conference call after the report was the 2 percent increase in market hogs (and in particular those from 120 to 179 pounds). On average, analysts were expecting a less than 1 percent increase.

This is “a turning point” and an indication that producers are starting to expand. Producers are taking a measured approach to expansion, but they are expanding.

As pork producers have seen negative margins since last fall, corn prices have been lower than expected and hog prices have been higher than expected, fueling the optimism borne out in the increased numbers seen in this report.

We can expect larger hog numbers going into the second quarter and beyond, noting the continued uptrend on pigs saved per litter as an indication that hog production efficiency continues to grow.

USDA reported the average pigs saved per litter were a record high 10.08 for the December-February period, compared to 9.97 last year.

The report put the December 2012-February 2013 pig crop, at 29.0 million head, up 2 percent from 2012. Sows farrowing during this period totaled 2.88 million head, up 1 percent from 2012. The sows that farrowed during this quarter represented 49 percent of the breeding herd.

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Source:  www.meatingplace.com, 3.29.2013

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