March 23, 2005

 

US hog data may suggest modest expansion

 

 

The government's quarterly hog report may show that US hog producers were cool to the idea of expansion this past winter despite economic prosperity, but imply that hog supplies might heat up during the upcoming summer months, according to industry sources.

 

The US Department of Agriculture's quarterly hog data will be released Thursday at 2:00 p.m. CST (2000 GMT).

 

Pundit's projections for the top three categories included a March 1 all-hogs-and-pigs estimate that ranged from 99.8 percent to 101.2 percent of a year ago, with an average of 100.6 percent.

 

Respondents submitted a 100.3 percent average projected kept-for-breeding figure from a 99.7 percent to 101.0 percent range. And they arrived at a 100.6 percent average kept-for-market number from forecasts that ranged from 99.7 percent to 101.3 percent

 

Although hog slaughters varied over the past three months, depending on weight class as indicated by the USDA in its last quarterly hog report released in December, supplies during that period were considered generally consistent with the agency's projections.

 

Meanwhile, feeder pig imports from Canada declined by about 300,000 head from December to February after the US imposed a tariff on Canadian hogs following a Commerce Department antidumping decision last October. However, US hog producer profits, strong pork demand and inexpensive feed grain may have to some degree helped offset the dip in Canadian imports.

 

Ron Plain, livestock economist with the University of Missouri in Columbia, Mo., said that his 101 percent all-hogs-and-pigs forecast represents possible slow expansion given the fact that producers made money last year.

 

Although producers improved their bottom lines, they were not short on supplies as evidenced by last year's record slaughter and kept most swine facilities full, said Plain. The winter is not conducive for building new swine facilities, so it is difficult to tell whether producers expanded operations from that standpoint, he said.

 

Bob Brown, independent analyst in Edmond, Okla., estimated a 0.9 percent increase in the December/February pig crop that would put the outcome at 25.32 million head, making it the second largest pig crop on record since the 25.5 million reported in 1998.

 

Brown also anticipates a modest 0.3 percent breeding herd increase compared with last year's low figure of 5.961 million head. Swine breeding herd productivity continues to increase, and any growth in that category would be a significant boost to supply prospects, he said.

 

Dan Vaught, analyst with A.G. Edwards & Sons in St. Louis, projected a 1 percent rise in the pigs-per-litter rate from a year ago. Producers may not have expanded production by adding sows, but could have maximized productivity through the number of pigs they were able to save from each litter, he said. Relatively mild temperatures over the winter and strong hog prices during that period made aggressive husbandry easier, he added.

 

"When combined with the 1 percent annual increase in the number of farrowings, this implies a 2 percent surge in the winter pig crop," said Vaught. "That holds similar implications for summer hog supplies," he said.

 

Vaught said it was hard to determine the extent that the US tariff on Canadian feeder pigs had on March 1 hog population figures in the States, but he suspects that the change might show up in the pig weight class numbers that could come in slightly below general expectations. He said his 101 percent marketing's forecast is attributed to the diminished southerly flow of Canadian pigs as well as the rather subdued rate of US expansion.

 

Vaught estimated the size of the US breeding herd at 100 percent of a year ago.

 

"We don't think the industry is terribly interested in expanding aggressively due in part to suspicions that such growth would likely require investment in new facilities rather than filling space already built," Vaught said.