June 29, 2004

US Hog Inventory Up 1% From Last Year

Hog inventories in the US are up slightly from a year ago, according to Friday's Hogs and Pigs report. The herd totals 60.1 million head as of June 1, up just about 1% from a year ago. All of the increase is recorded in market hogs. The breeding herd is just over 5.9 million head, down 1.5% from last year and down 4,000 from the March inventory. This is the smallest breeding herd on record.

Hog slaughter will remain above year ago levels for the next several months at least. The inventory of hogs weighing more than 60 pounds is up about 2% from last year's level. In addition, hog imports continue to surge from Canada, adding to the number of hogs available for slaughter. According to the new data, slaughter will probably be up about 3% over the summer and into fall.

Hog producers say they will farrow 1.3% fewer hogs this quarter than they did a year ago. But they said they would farrow 2% less in March. Good prices and profits over the last few months have encouraged producers to begin to think about expansion. For the Sep-Nov quarter, producers intend to farrow almost the same number of hogs as they did in 2003. If prices remain high through the next couple of months, actual Sep-Nov slaughter could even be up year-over-year. Pre-release estimates had suggested lower farrowings than indicated in the report, which will be bearish for deferred hog futures next week.