March 26, 2009

US hog numbers remained under year-ago levels as industry losses and a weak economy kept production down, but hog supplies may soon stabilise as better animal husbandry has producers saving more young pigs, livestock analysts said.

The weak economy was a key reason that producers reduced production. Exports and domestic consumption of pork declined as the economy spiralled down last year, while domestic pork consumption has since recovered.

The US Agriculture Department (USDA) will release its hog report on Friday (Mar 27) and it is expected to show 1.5 to 3.7 percent fewer hogs on US farms as of March 1 and a breeding herd, which will produce future hogs, down 1.5 to 3 percent, according to analysts.

On average, trade estimate put the report's hog herd at 97 percent of a year ago, breeding herd at 97.8 percent, and market hog supply at 96.9 percent.

Analysts said that even though futures held high price levels, producers cut back on their hog herds, because prospects for the economy recovering quickly were bleak.

However, analysts also said prospects look better down the road, along with greater pigs-per-litter numbers which may start to hold or limit any further herd reduction, adding that producers would quit liquidating herds if profits improve.

Livestock economist Ron Plain said producers have had losses for about six quarters now, but the industry might not have backed down as much as many believe, as strong industry efforts to protect and raise young hogs has also increased the number of hogs produced per sow.

Pig-per-litter estimates for December-February period averaged 101.8 percent.

Overall hog numbers, however, are down due to reduced production late last year when record high feed costs and skyrocketing fuel costs had producers in both the US and Canada pulling back.