Swine Economics Report
March 22, 2013
On March 28, USDA will release the results of their latest survey of the U.S. swine inventory. My estimates are that the breeding herd is 1.2% larger than a year ago; the market hog inventory is 0.8% larger; and the total herd is 0.8% larger than in March 2012. My estimates of the March 1 market hog inventory by weight groups are: 180 pounds and heavier 101.9%, 120-179 pounds 99.8%, 50-119 pounds 100.4%, and under 50 pounds 101.1% of a year earlier.
December-February sow slaughter was down 1.1% compared to a year earlier. The number of Canadian sows imported for slaughter was up 3.4%. Adjusted for imports, slaughter of U.S. sows was down 1.9%, out of a sow herd that was 0.2% larger than 12 months earlier. Our gilt slaughter data shows more gilts were retained this winter than last.
I anticipate no major revisions of USDA's December hog inventory estimates. Slaughter of barrows and gilts during December-February was down 0.3% from a year earlier. USDA's December report implied fall slaughter would be up 0.1%.
In their last inventory report, USDA predicted that December-February farrowings would be unchanged compared to 12 months earlier and March-May farrowings would be 1.9% lower than a year earlier. I think that winter farrowings were down 0.0%. I'm forecasting spring farrowings to be down 1.2% and June-August farrowings up 0.7% compared to last summer.
I'm estimating pigs per litter to have been up 1.1% this winter. My estimate is the December-February pig crop was 101.1% of a year earlier.
My estimate of hogs in the 50-179 weight groups implies that daily hog slaughter during the second quarter will be very close to year-ago levels. I expect hog slaughter during the third quarter of 2013 to be up 0.6% on a daily basis compared to the number slaughtered in July-September 2012.
Look for fourth quarter 2013 slaughter to be up 0.6%. I expect first quarter 2014 daily slaughter to be up 1.9% compared to this year.
I expect live hog prices to average close to $65/cwt ($85/cwt carcass) in the second quarter of 2013 and $66/cwt ($86 carcass) in the third quarter. I'm looking for fourth quarter of 2013 to be close to $58/cwt ($76/cwt carcass) with $59/cwt ($78/cwt carcass) price average in the first quarter of 2014.
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