Swine Economics Report
June 15, 2015
On June 26, USDA will release the results of their latest survey of U.S. hog producers. My expectations are that the breeding herd is 1.8% larger than a year ago; the market hog inventory is 8.5% larger; and the total herd is 7.9% larger than in June 2014. The big increase in the market hog inventory relative to the breeding herd inventory is because of less death loss from the PED virus.
My estimates of the June 1 market hog inventory by weight groups are: under 50 pounds 107.2%, 50-119 pounds 108.7%, 120-179 pounds 109.4%, and 180 pounds and heavier 109.8% of a year earlier.
Slaughter of U.S. raised barrows and gilts during March-May was up 8.5% from a year earlier. USDA's March report implied spring slaughter would be up 7.2%. An upward revision of USDA's September-November pig crop estimate is highly likely.
It appears that the average daily hog slaughter during June will be about 10% higher than last year which is 3.4 percentage points more than what was implied by the March survey.
Hog profits were record high last year which is a good reason to anticipate a bigger sow herd. Adjusted for imports, slaughter of U.S. sows during March-May was up 2.7%. The sow herd was 2.2% larger than 12 months earlier, so sow slaughter relative to the inventory was up 0.5%, implying no growth. But, our gilt slaughter data show more gilts retained this spring than last.
In their last inventory report, USDA predicted that March-May farrowings would be up 2.1% compared to 12 months earlier and June-August farrowings would be 2.1% lower than a year earlier. I believe spring farrowings were up 2.0%. I'm forecasting summer farrowings up 1.0% and fall farrowings to be down 0.6% compared to last year.
USDA said pigs per litter last winter were up 6.7% compared to a year earlier. I'm estimating that less death loss from the PED virus caused pigs per litter to be up 5.2% this spring. My estimate is the March-May pig crop was up 7.3% from a year earlier. I expect the June-August pig crop to be up 3.3% compared to last summer.
If my market hog inventory estimates are close to right, hog slaughter during the third quarter of 2015 should be up roughly 9% compared to a year-ago. I expect hog slaughter during the fourth quarter of 2015 to be up 6% and first quarter slaughter to be up 3-4% compared a year earlier. I expect 2016 hog slaughter to be a record 117 million head.
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