Swine Economics Report
December 23, 2013
On December 27, USDA will release the results of their latest survey of the U.S. swine herd. The report is highly anticipated for indication of the impact of PED virus on hog numbers. My opinion is that PED is offsetting herd expansion and productivity growth, thus leaving the market hog inventory close to the year-earlier level.
My predictions are that the breeding herd is 1.0% larger than a year ago; the market hog inventory is 0.3% smaller; and the total herd is 0.1% smaller than in December 2012. My estimates of the December 1 market hog inventory by weight groups are: 180 pounds and heavier 99.8%, 120-179 pounds 100.0%, 50-119 pounds 99.6%, and under 50 pounds 99.4% of a year earlier.
I anticipate large downward revisions of USDA's September market hog inventory estimates. Slaughter of barrows and gilts during September-November was down 4.5% from a year earlier. USDA's September report implied fall slaughter would be down 0.5%. It appears that the average daily hog slaughter during December will be between zero and 1% lower than last year rather than up 1.1% as implied by the September survey.
The sow herd is growing. Adjusted for imports, slaughter of U.S. sows during September-November was down 6.6%, out of a sow herd that was 0.4% larger than 12 months earlier. Our gilt slaughter data show more gilts retained this fall than last.
In their last inventory report, USDA predicted that September-November farrowings would be up 0.4% compared to 12 months earlier and December-February farrowings would be 0.9% higher than a year earlier. I think that fall farrowings were up 0.1%. I'm forecasting winter farrowings to be up 0.5% and March-May farrowings to be up 1.0% compared to last spring.
I'm estimating the PED virus caused pigs per litter to have been up only 0.3% this fall. If I'm right, that would be the smallest increase in pigs per litter since the summer of 2004. My estimate is the September-November pig crop was up 0.4% from a year earlier.
I expect hog slaughter during the first quarter of 2014 to be down 0.1% compared to a year-ago. I expect hog slaughter during the second quarter to be down 0.6% compared to the number slaughtered in April-June 2013.
If I have under-estimated the impact of PED, then my market hog numbers are too high.
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