US hog herd seen at three-year low, but decline slowing

US hog producers continued to reduce their herds early in 2010, which is seen to put the March 1 hog herd at its lowest level in three years, according to analysts.

Hog producers have reduced herds after losing money for nearly two years. High feed and fuel costs started the losses and later the recession and AH1N1 flu hurt as those events slowed pork sales.

The USDA will issue its first quarterly hogs and pigs report for 2010 this week and analysts, on average, estimate the US hog herd at 99% of a year earlier, the breeding herd at 97.4%, and the market hog supply at 99.1%.

Analysts also expect about a 2% downward revision in some parts of the December hog report as USDA slaughter data for the quarter was less than what the report indicated.

They expect the June-August pig-crop number and sows farrowed in the December report to be revised down about 2%, but the market hog number will likely be revised less than 1%.

Meanwhile, analysts are also worried that producers could expand production too quickly, as demand slowly recovers after being slow the past two years, and is still not good enough to absorb a quick run-up in hog numbers, they said.